Getting to grips with intergenerational wealth planning
- Describe some of the challenges with retaining children of clients
- Explain ways to recruit them
- Identify how they differ from their parents
- Describe some of the challenges with retaining children of clients
- Explain ways to recruit them
- Identify how they differ from their parents
The rise in “blended families” will soon mean intergenerational wealth planning will become a necessity for advisory companies looking to future-proof their business.
Chartered financial planner Victoria Ross believes the increase of non-traditional family structures means that many people now have more complicated needs when passing on their wealth, but she insists that independent financial advisers are in the best position to help.
Ross, from Leeds-based Progeny, says: “In the years ahead, we’re likely to see more families having more complex requirements when it comes to passing on their wealth to the next generation as a result of factors like the increasing instance of blended and non-traditional family structures. This makes financial advice and lifetime financial planning more important than ever.
“The consideration of how wealth may be passed efficiently to the next generation is a key pillar of good financial advice, and our role as advisers is to create the space for constructive, multigenerational conversations within families.
“As client books mature, building an intergenerational wealth transfer strategy is key to future-proofing any advisory business, but more importantly it is key to protecting clients’ assets and ensuring they are passed to the next generation as effectively as possible.”
Rise in the inheritance economy
The highly anticipated transfer of wealth from baby boomers to their children and grandchildren is another reason why it is essential for advisers to help families manage their wealth across generations.
In fact, estate administration specialist Kings Court Trust has estimated that the inheritance economy will be worth £5.5tn over 30 years.
Quilter pensions expert Ian Browne fears that IFAs who do not have a strategy to capitalise on this could end up harming their company.
He says: “Millennials, the generation most likely to be the children of baby boomers, are in prime position to inherit and have been called by some ‘the inheritance generation’.
“It’s quite simple – those advice businesses which wish to remain valued need to have an intergenerational wealth strategy. Without one, the death of your clients could harm your business. But this strategy should not simply be about long-term wealth management to protect the current value of clients, it’s also a growth strategy.”
Those advice businesses which wish to remain valued need to have an intergenerational wealth strategy. Without one, the death of your clients could harm your business Ian Browne, QuilterHowever, Scott Gallacher, chartered financial planner and director at Leicester-based Rowley Turton, warns that this great transfer of wealth can also present challenges for advisers wanting to retain assets.
