When it comes to helping clients pass on their wealth, advisers can often find themselves with a conflict of interest between the different generations. People have different priorities at different life stages and getting grandparents, parents and children on the same page can be difficult.
Tough or tender?
Parents may feel a natural tension between taking a tough and tender approach to their children. They want their children to be independent, hard-working and able to achieve success on their own, yet they may also feel the need to provide a safety net and want to help them out. Charles Stanley’s research shows that more than two in five adults say they intend to make significant lifetime gifts to their families. Some want to save inheritance tax, often to the potential detriment of their own financial security, while others simply get a lot of pleasure out of giving during their lifetime and want to be able to see their families benefit.
The venerable bank of mum and dad and the desire to help both children and grandchildren must be balanced with ensuring clients have robust financial foundations for their own old age. Longevity also means that inheritances are now coming later in life than before and the next generation can often need help at an earlier stage in their financial life. Advisers may also find themselves having to manage the tensions that can arise if there isn’t a perceived equal distribution of wealth, particularly if it hasn’t previously been discussed.
Managing priorities
A growing role for advisers is to help families resolve these issues through open and honest communication, and to encourage them to talk openly about money defining and reconciling their priorities. It is also important to identify when extending the focus of planning from the individual client to the whole family is appropriate and when it is not.
Visit www.charles-stanley.co.uk/advisers/book-of-stories to get your free copy of our whitepaper, which contains practical tools to help you extend financial advice to the next generation. As a little extra support, you can claim 2 hours of CPD.
If you would like to discuss anything in the whitepaper or understand how Charles Stanley could help you; get in touch today.
By John Porteous, Group Head of Distribution, Charles Stanley
About Charles Stanley
At Charles Stanley, we have over 200 years of experience in helping build financial security for clients, working with their other professional advisers to create a circle of advice that is able to adapt, as families evolve into multi-generations over time. We understand that everyone has their own unique needs and life goals. Our lives are like a kaleidoscope, with many moving and inter-connected parts and the slightest shift can quickly change the bigger picture. We provide a new perspective and can help you adapt to changing priorities to future-proof your business.
Charles Stanley & Co. Limited is authorised and regulated by the Financial Conduct Authority.