How tech can help with wealth planning

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How tech can help with wealth planning
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The great wealth transfer is beginning to take place and that brings a new, younger generation of wealth owners and the added challenges of financial advice in a technology-driven world.

FTAdviser In Focus caught up with veteran financial adviser Andy Kirby, co-founder and chief executive of Money Alive, to hear his thoughts about how advisers can overcome issues advising younger generations.

He also discussed the sort of technological innovation in intergenerational wealth planning that could make the process easier for both adviser and client.

FTAdviser: What are the main problems that advisers will face with the next generation of wealth owners?

Andy Kirby: Because of the economics of compliant service delivery, many advisers have a minimum investment threshold before they offer their services.

There are many factors, including high housing costs (high rents/house prices), less secure employment, student debt repayment, and simply the lack of time to accumulate wealth, that mean younger people do not always have the resources to meet these minimums.

Many passively end up in a default fund and with little or no understanding of important concepts.Kirby

They may instead form a relationship with a different kind of service provider with a low minimum investment threshold and, once established, may not necessarily appreciate or understand the value of a professional advice service when they do eventually build up a larger portfolio.

FTA: What methods are advisers using to retain younger clients? How will these methods change compared to their parents/grandparents?

AK: Advisers who use Money Alive have been using our box sets on wills and lasting power of attorney to engage with the next generation.

Clients need to appoint executors for their wills and attorneys for their LPA and often choose younger and closely related people - typically adult children - to fulfil these roles.

We suggest advisers encourage their clients to watch these box sets with their adult children so they have a better understanding of these arrangements.

We’ve found younger people welcome and enjoy this approach as they are used to technology providing information as and when they want it.

FTA: Do you think the pandemic has accelerated the urgency of developing technology in intergenerational wealth planning?

AK: I think it’s much about using existing technology more widely. For example, video meetings have been used in other professions for years (Skype video calls have been going for over a decade) but the advice industry can be slow to adapt to change and recognise the benefits of technology.

Covid has been a huge catalyst in this regard. Having been forced to use new methods, [advisers] can see the benefits so these new approaches will stick.