Adopting technology is going to be “vital” for advisers to ensure they maintain relationships with their clients' families, according to Ben Barratt, managing director at First Sentinel Wealth.
Speaking on the FT Adviser podcast, Barratt said the advice industry was going to see a “massive shift” in the way people want to interact with their finances.
“You have a generation of advisers who are on average in their late 50s, and I don’t think they truly prepared for the shift that’s going to happen,” he said.
Gillian Hepburn, commercial director at Benchmark, highlighted the need for advisers to start making connections with their client’s families if they do not want to lose assets as a result of the great wealth transfer.
“We know the stats, £5.5tn of assets will transfer across the generations in the next 30 years and I think that is a challenge upfront because many advisers think they won’t be in the industry in 30 years so they just focus on what they’re doing now because it’s serving their business,” she added.
Hepburn suggested there needed to be a change in mindset of advisers if they want to engage with younger generations.
She said: “We look at the number of advisers prepared to work with clients with less than £50,000 to invest, which, you could argue, is the next generation and that's reached an all time low of only 25 per cent of advisers.
“So we have this disconnect, in terms of advisers concerned about losing wealth, but actually, we don't really see the numbers stacking up in terms of whether or not they're approaching this.”
Barratt also highlighted that families needed to start talking more about finances between themselves.
He said: “I found even being a financial adviser myself, my parents still haven't got to the point really, where they've been fully transparent with everything about their finances and I think that's a very common situation amongst the Boomer generation.
“There's a bit of a taboo about how you pass these assets from one generation to another. And I think adopting technology is going to be vital for assisting with that wealth transfer.”
To hear more about what advisers need to do to engage with their clients' dependants and to overcome the challenges they face in doing so, click on the image above.
alina.khan@ft.com