FTA: Is there room for a new "face" of intergenerational wealth advice to develop? If so, what would it look like?
AL: There is an increasing demand for advice and, as wealth passes into the hands of the next generation, the need for advice is only going to increase. In my view, the focus is going to change.
Traditional pension planning is less relevant to the next generation; there’s less ability and incentive to save in the same way. We are likely to see more of a focus on fees and returns, with a generation potentially more knowledgeable and inquisitive than their parents and grandparents, given the ease with which they can access information.
As the next generation tends to be more comfortable with change, I see a greater frequency of life transitions. With a desire to ensure their own wellbeing, instant results and gratification and less toleration of untailored output, I believe there will be an expectation of comprehensive, flexible advice and service, delivered well.
The industry will need to evolve and find innovative ways to capture and retain this growing client bank. I think a new ‘face’ of advice will be a combination of face-to-face and digital.
Technology will help deliver a lower-cost proposition, with products and services tailored to meet a more diverse client group and a focus on ESG, delivered by a diverse group of advisers that look, act, sound and operate differently from each other.
FTA: How can you help clients prepare for the generational wealth transfer?
AL: Engagement and education is essential and a large part of getting this right is an appreciation for the need to ensure diversity, especially within client facing distribution teams.
A new generation of more ethnically, socially and gender diverse, of differently-minded young people, are not all going to want to be engaged by today’s typical adviser.
A recent RBC Wealth Transfer study estimated that only 35 per cent of inheritors are prepared by their families or donors to inherit wealth. In my experience, where beneficiaries are prepared and there’s a plan in place, this creates confidence and trust, with a greater willingness to engage with advice.
As wealth management businesses and advisers, we can play our part by offering pro-bono advice, engaging with local schools to support financial literacy and education programmes.
We should also encourage families to talk more about money, wealth and protection and ensure our businesses represent an increasingly diverse society.
FTA: Can we draw any links between the impact of Covid and the future of intergenerational wealth? Has it hindered or brought plans forward?
