Some 91% financial advisers are concerned about losing assets when clients’ wealth is transferred to the next generation according to Scottish Widows’ latest Investment Confidence Barometer
Over half (57%) said that they only expect to retain services for a minority of their clients’ dependents on the death of the client.
Nearly 74% of adviser respondents said that they had a dedicated intergenerational planning strategy in place for most of their clients.
To read more on this topic, visit: Just 26% of advisers have wealth transfer strategy
The survey also revealed that while 75% of advisers believe it is important to foster a relationship with their clients’ children, only 17% have built a relationship with the majority of their clients’ offspring.
This figure drops to 12% when it comes to clients’ grandchildren and only around a quarter (26%) of survey respondents had established direct contact with spouses for most of their clients.
Scepticism of younger generations
Some 70% of advisers cited the scepticism of younger generations towards the value of financial advice as the greatest barrier to dealing with clients’ dependants.
However, nearly half (48%) of advised clients surveyed said that they were willing to pay for their children’s financial advice.
The survey also revealed that many advisers (65%) find it difficult to discuss the client’s death with the client and their spouse or dependents (69%).
It also showed that 41% of advisers only talk about estate planning at or after retirement and that 16% wait until their clients are into their 70s or older.
Nearly a quarter (24%) of advisers wait until the client initiates the conversation themselves, while one-in-five (21%) discuss it only when the client becomes seriously ill.
More than half of both advised (59%) and non-advised (56%) investors surveyed said that the need to fund health and care costs in later life was a barrier to passing on wealth to dependents.
Ranila Ravi-Burslem, intermediary distribution director at Scottish Widows, commented: “Our survey results suggest that there is scope for advisers to dial up engagement with clients’ dependents. Crucially, the results also emphasise the need to have earlier conversations with clients about estate planning.
“Given that clients can pass pension wealth down the generations, advisers must ensure their clients not only have their beneficiary nominations in place, but that these are regularly reviewed as circumstances and priorities can change. Advisers should also to look to engage with named beneficiaries early.”
