Your Industry  

IHT windfalls shift focus to clients' children

IHT windfalls shift focus to clients' children

Some of the UK’s biggest advice providers are seeking to build relationships with their client’s children as they prepare for large-scale inheritance.

In the face of a generational shift, the firms remain confident about the appeal of face-to-face advice rather than its newer, technology-driven robo equivalent which younger clients are thought to prefer.

Recent research by the Institute for Fiscal Studies found that younger generations are likely to rely on inheritance for their wealth and are likely to inherit more than any previous generation.

Article continues after advert

The IFS found that between 2002 to 2003 and 2012 to 2013, the wealth of elderly households increased by 45 per cent, mostly as a result of higher homeownership and rising house prices.

Advisers told FTAdviser they are preparing for the shift in assets from baby boomers to their children and grandchildren.

A spokesperson for Old Mutual Wealth said: “Despite technological advances, face-to-face advice remains our firm’s most valuable service.

“When it comes to their money, people want to feel secure that it is in safe hands  and appreciate a human touch.

“While the upcoming generations are increasingly interested in digital advice, when they accumulate substantial savings or inherit large wealth a human interaction is important them.  

“To assist client’s children when they first start saving, we have tools on the platform that make transactions simple. This includes a self-service option that allows clients to top-up their Isa and collective investment accounts online.”

Old Mutual Wealth said that in November 2015 it asked 800 adults aged 55 and over about their interest in robo-advice and found only 4 per cent would use a robo-advice service with no human interaction.

Helen Ball, group distribution and development director for Tenet, said: “Advisers should ideally aim to build relationships with the next generation of their client bank, with the recognition that it tends to be a long term game when building rewarding relationships with younger people.

“In terms of robo-advice, we expect robo-processes to support advisers with their own processes rather than replacing them.

“For some time now customers have been responding to things like direct offers, but when matters become more complex or customers become cash rich/time poor, they will continue to seek out professional advice.”

St James’s Place last year revealed it was planning a series of new product and service launches in 2017, aimed at helping its advisers and their clients with the challenges of intergenerational wealth. It declined to give an update on this.

Philip Martin, marketing director of Openwork, said: “We are actively exploring ways that businesses like Openwork can provide advice and other services to clients in different ways other than just face to face.”

Tilney Bestinvest and Brewin Dolphin did not respond.