In Focus: Intergenerational Wealth  

Are advisers ready for the great wealth transfer?

Are advisers ready for the great wealth transfer?

Ahead of the great wealth transfer, advisers need to be aware of the changing face of wealth, as younger, diverse clients pose a new set of challenges and opportunities. 

Alex Loydon is director and partner, engagement and consultancy at St James's Place. Speaking to FTAdviser in Focus, she shared her thoughts on how advisers need to shape intergenerational wealth planning.

FTAdviser: How can advice firms bring new blood into the industry?

Alex Loydon: Advice firms need to think about entry points into the profession for younger people and those from different social, economic, cultural and educational backgrounds.  

Ultimately what they want, and need access to, are sponsored, relevant and proper training and development programmes at all levels – whether they are school leavers, apprentices, graduates or second careerists.

In addition, they should enable access to brilliant role models and mentors, with a diversity lens on all aspects of their business. Ultimately, it’s fundamentally important that they have the right proposition for a new generation of target clients. 

FTA: What do you feel are the main barriers to attracting more diverse advisers into the industry?

AL: Traditionally, the lack of regulation was a barrier. Being an adviser wasn’t necessarily a career aspiration. It wasn’t deemed to be a profession in the same way as law or accountancy, for example, and there were few structured entry points into the profession.

That has now changed and with training options such as the SJP Academy and Quilter's Training school, it has improved the perception and practices of the profession.

However, we need to be pushing these entry points in the right arenas, raising awareness with schools, universities and career advisers. The lack of financial education in schools remains a big barrier.

Put simply, they don’t understand it, and so it still in many respects remains the preserve of those that grow up around wealth.

In addition, recruitment strategies and interview processes can be barriers. Hiring managers can sometimes be guilty of recruiting candidates similar to themselves, so blind recruitment processes and more tailored and inclusive interview questions could help attract a broader range of candidates.  

FTA: The Great Wealth Transfer is about to take place. A new generation of more ethnically, socially and gender diverse, differently-minded young people will receive a lot of money over the next decade. Is the financial advice industry equipped to serve these new potential clients? 

AL: The objectives of the next generation are going to differ and it will be the responsibility of financial service businesses, and their advisers, to ensure they are equipped to meet these changing demands. 

They must be responsible businesses themselves, reflecting the values of the next generation and the type of business a new generation of client wants to deal and be associated with. I think the industry is waking up to this, but not all advisers are and they will need to, if they are to secure the clients of the future.