Four simple steps to stop intergenerational wealth walking out the door

abrdn estimates that in the UK, £5.5 trillion worth of assets will be transferred within families by 2050, while Schroders found that 63% of advisers are concerned about losing business as wealth passes down through the generations.  

There’s much debate about what will happen to the wealth of advised clients in the baby boomer generation over the next few years. Some clients expect to pass down money via large inheritances after their death. Others want to transfer wealth sooner through financial gifts to help loved ones with their current needs, like home purchases, university fees, wedding funds and debt repayments. And some worry they won’t have much wealth left to pass on after increased longevity, long-term care costs, equity release and inheritance tax take their toll.

What’s certain is that a significant slice of advised wealth is set to transfer from older clients over the next couple of decades. To maintain or grow assets, advice firms need an intergenerational wealth strategy to stop money walking out the door when a client dies. We’ve put together four ideas to help you embrace and manage clients’ families, so your firm continues to look after their wealth as the future unfolds.

1. Involve the whole family in the financial planning

Engaging with multiple generations means involving the whole family in your financial planning process. With intelliflo office, you can base your business management system on families rather than individuals to help you maintain strong relationships across the board. When you are advising different family members, having an overview of the family finances, alongside specific advice for each individual, will help to ensure wealth transfers are carefully considered and well-managed.

Even if you don’t advise the whole family at the moment, make sure your KYC data includes information on family members so you know who potential beneficiaries might be further down the track. Coordinating with family solicitors and accountants can also place you in a trusted position within the family’s circle of influence.

2. Offer services and tools that appeal to different generations

Providing services tailored to younger family members can help bring them into your advice firm at an early stage, making it easier to retain them as clients when they inherit or are gifted money. Younger people are used to going online for just about everything, but there is also a rise in ‘silver surfers’ who are comfortable using digital tools. intelliflo’s client portal is accessible via smartphones, ipads, laptops and desktops so users can sign in from their preferred device.

Recommending that clients use the portal as a secure digital filing cabinet for storing important personal as well as financial documents can help encourage regular usage and avoid the stress of a relative passing away with key material stored in unknown locations or locked away behind impenetrable passwords. ‘Pooling’ wealth through family linking, so well-established clients shoulder more of the cost of advice, can also help less wealthy offspring access advice sooner and puts you in a good position to continue working with younger relations when wealth transfers.

3. Provide choices for how clients interact with your firm

Offering families different ways to interact with your firm is essential to keeping them engaged, whether it’s to talk about their concerns, get practical help, exchange information or complete documents. While face-to-face contact remains important, video calls can allow multiple family members to participate in meetings, ensuring everyone understands each other’s financial objectives.

Text and WhatsApp-style messaging are useful communication channels alongside telephone and emails, especially for reaching younger clients, while a central client portal allows everyone to access their financial data at a time that suits them.

4. Incorporate potential intergenerational transfers in cashflow planning

Sophisticated cashflow planning, tailored to the age and financial status of individual family members, will help focus minds on what needs to be considered when wealth is passed down. Running different scenarios in cashflow tools can help the older generation make informed decisions about leaving an inheritance versus gifting money earlier, including the tax consequences of each option.

Meanwhile, potential recipients of wealth can see how the money could impact their financial situation, whether their goal is long-term investment, paying off debt, or buying property. intelliflo’s client portal contains a range of cashflow modelling tools, allowing individuals and families to explore various ‘what if’ options at their own pace, potentially opening up new conversations about their future finances.

Intergenerational wealth strategies are primarily about developing strong connections with your clients and their families. By embedding the right technology throughout your advice journey, intelliflo office can ease your admin burden, giving you more time to focus on building lasting client relationships. As well as improving efficiency, their engaging tools enhance the customer experience, supporting your interactions across the generations. By including the interests of the entire family within the financial planning journey, you can make sure the coming great wealth transfer won’t be a great transfer of assets away from your firm.

Book a demo to discover what’s possible with intelliflo.