There is a clear opportunity for advisers to offer more ‘intergenerational’ financial planning, with two-thirds of people accessing financial advice using the same adviser as their parents.
This research, by Prudential, suggests there is a significant opportunity for advisers to target different generations within one family. While many use the same adviser, this report suggests that that advice is often tailored to individual needs and too not taking account of broader family-wide aims.
Its Family Wealth Unlocked survey found that 67 per cent of people whose parents have a financial adviser will also use them.
The research found that around two fifth (43 per cent) of respondents said they would feel relaxed about using the same adviser as their parents, while a third (34 per cent) said they would be more likely to trust an adviser used by their parents.
However Prudential’s research found almost half of those surveyed (49 per cent) said they preferred to pay for advice separately, rather than seeking advice on a range intergenerational issues, such as inheritance, or family tax planning.
The report, looks at intergenerational planning and wealth transfer between advised families amid the financial volatility and insecurity of the pandemic. It suggests that family might be more willing to discuss these financial issues as a result of the Covid crisis.
Despite the need for a tailored approach to advice, the study pointed to a broadly positive approach to discussing finances openly within the family. Almost half 47 per cent admitted to ‘talking openly to each other about finances’ with only 7 per cent revealing they ‘don’t trust their family members’.
People were most likely to seek fadvice following a change in their financial circumstances. The three most common reasons listed in this research were an unexpected windfall (24 per cent) receiving an inheritance (24 per cent) and preparing for retirement (23 cent.)
Prudential said that while integrating families’ financial situations will enable more holistic wealth transfer opportunities, advisers need to balance these wider needs with individual generation-specific objectives, be it saving for a deposit, school fees or planning for retirement.
Prudential director of specialist business support Vince Smith-Hughes says: “Families are becoming increasingly aware of their legacy and wealth transfer.
“It appears the Covid-19 pandemic has been a contributing factor in bringing families together to talk more openly about their futures, consider their financial goals and begin planning accordingly.
“Our report also highlights how, especially for the younger generations, the need for financial support and guidance is most pronounced. It is hugely encouraging that many people are seeking the services of the same financial adviser as another family member at some stage during their life. And, with around 86 per cent of those seeking advice actively doing so in the last five years, it seems the value of advice is increasingly being understood.”
Prudential points out though that there is potential to expand these services, with around a third of people not have access to a ‘family adviser’.
Smith-Hughes adds: “With £5.5 trillion set to pass to the next generation over the coming years, this is an issue that advisers must help to tackle.”
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