Advisers must be ready for £1 trillion wealth handover

The size of the loss of inheritance through generations is cause for concern.

A client’s family should be second on the list of priorities for a financial adviser, after their relationship with a client.

Most people understand inherited wealth reduces as it spreads among inheritors. However, the much larger problem relates to the size of losses between generations.

The first priority for any client relationship is working towards their specific financial needs. However, too many financial advisers solely focus on the immediate needs of the client without recognising a proportion of a client’s wealth will be inherited by the next generation.

Wealth transfer is not something that only happens after death. It is increasingly happening during a client’s lifetime as contributions to costs such as education and house purchases become commonplace.

IFAs should offer advice to clients on the preservation of and access to wealth for themselves and their inheritors. Activities such as inheritance tax planning are diminished in value if we are not able to consider the financial situation of inheritors.

This means we should be interacting with all parties and, where needed, educating the next generation about how best to manage the transfer of wealth across generations.

David Hazelton is manager of practice intelligence at Raymond James Investment Services.

A client’s family should be second on the list of priorities for a financial adviser, after their relationship with a client.

Most people understand inherited wealth reduces as it spreads among inheritors. However, the much larger problem relates to the size of losses between generations.

The first priority for any client relationship is working towards their specific financial needs. However, too many financial advisers solely focus on the immediate needs of the client without recognising a proportion of a client’s wealth will be inherited by the next generation.

Wealth transfer is not something that only happens after death. It is increasingly happening during a client’s lifetime as contributions to costs such as education and house purchases become commonplace.

IFAs should offer advice to clients on the preservation of and access to wealth for themselves and their inheritors. Activities such as inheritance tax planning are diminished in value if we are not able to consider the financial situation of inheritors.

This means we should be interacting with all parties and, where needed, educating the next generation about how best to manage the transfer of wealth across generations.

David Hazelton is manager of practice intelligence at Raymond James Investment Services.

Source: Inheritance Economy/CEBR 2017

Source: Inheritance Economy/CEBR 2017

Source: Inheritance Economy/CEBR 2017

Source: Inheritance Economy/CEBR 2017

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