Millennials and Generation Z earning over £50,000 per annum may switch financial advisers following the inheritance of managed assets, a report from Time Investments has found.
The research, The Intergenerational Wealth Report, found that one fifth of those surveyed would not leave any inherited assets with the same adviser, and just 4 per cent said they would leave all assets with the same IFA.
The report surveyed 500 people - 250 aged between 18 and 26 (Generation Z), and 250 aged between 27 and 42 (Millennials) - all with an annual income of £50,000 and above.
It found that many Millennials and Generation Z do not have a relationship with the adviser who currently manages the assets they stand to inherit and that this poses a "significant challenge" to advisers.
For example, 47.5 per cent of those surveyed do not have a relationship with the adviser used by the family members they are expecting to receive an inheritance from.
However, the research also reported that 46 per cent of those who don't have a relationship with the family adviser said they would continue to use the same adviser when the wealth is eventually transferred to them.
This is compared to the 28 per cent of respondents who said that they would not stick with the same adviser..
A further 26 per cent said they do not know who they will use, thereby suggesting they are open-minded either way which presents an "open-door opportunity" for advisers to make them clients.
Additionally, Time's report revealed how much Millennials and Generation Z are expecting to inherit, revealing that these sums are "significant".
Some 19 per cent expected to receive more that £600,000, 14 per cent expect between £400,000 and £600,000, and 20 per cent will inherit between £200,000 and £400,000.
Time Investments business line director, Tom Mullard, commented: "Our report shows that Generation Z and Millennials earning over £50,000 per annum have an eye to the future and are actively engaged in saving and long-term financial and inheritance planning.
"They are financially savvy but also very much open to advice."
Mullard additionally stated that almost half of those surveyed are already using a financial adviser to help them on this journey, seeking guidance on different aspects of their finances.
"However, the findings also clearly show that at the point of intergenerational wealth transfer, there are gaps in interactions that the adviser community needs to address to prevent the potential loss of significant AUM," he added.
"Here, engagement is key and finding new ways of making advice accessible, relevant and ensuring it adds value is crucial."
tom.dunstan@ft.com
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