Investments  

How to manage conflict over asset distribution

This article is part of
Guide to intergenerational wealth transfer

“A lot is about communication and managing expectations. Conflict arises if someone has an expectation that is not then realised.”

Conversations around money can be quite emotive and so it is not unusual for people to disagree with their loved ones over the best way to save, invest and spend. 

But Gemma Harle, managing director of Quilter Financial Planning, says she finds that people are respectful of the person who has earned the money. 

“For instance if the parents have saved over their lifetime and are engaging with their children about what to do with the pot they’ve built up the children will offer their views but ultimately respect their parents’ wishes,” adds Ms Harle.

Sustainability

According to advisers, one area of major interest for millennials when it comes to where to put the money is sustainability, but it is also an area that other generations are increasingly looking at.

“[Millennials] tend to ask what are the options for sustainable or responsible investing and that opens up a conversation that perhaps others in the room hadn’t considered,” says Ms Harle.

“We need to be cognisant that financial journeys have altered dramatically over time.

“Millennials face a series of difficulties in building wealth thanks to a combination of rising house prices, insecure employment, and higher debt (including student debt). They are therefore very conscious of how they are going to build up money.”

Interest in sustainable investing jumped from 71 per cent in 2015 to 85 per cent in 2019, and in millennial investors from 84 per cent in 2015 to 95 per cent in 2019, according to the Morgan Stanley Institute for Sustainable Investing.

Mr Morris says most clients who have received a lump sum inheritance or take over a portfolio tend to trust their parent’s judgement, especially if they aren’t experienced investors.

“As they become more confident, that’s when their values can change,” says Mr Morris.

“For example, when it comes to the companies they invest in. Their parents (baby boomers) often held utility companies – perhaps from privatisation, oil companies, and even tobacco companies. Those aren’t usually a preference for the majority of younger (gen X and millennial) clients. There is an increasing trend to invest in companies that have a positive impact on society.

“Other than that, generally younger people feel the need and have the ability to take on more risk. Although that has changed since pension freedoms with more people in drawdown understanding the benefit of a larger holding in equities than those who planned to take annuity. This is mainly down to the time horizon being extended.”