Expert: Sebastian Lewis, Senior Strategist, Advisory Research Centre, Vanguard Facilitator: Paul Kearney, Asset Risk Consulting
Headlines:
- The significant amount of wealth expected to be transferred in the coming decades, differences in inheritance tax policies between the UK and US
- The importance of engaging with clients' families and spouses, and the need for advisors to adapt their approach to better serve the next generation of clients
- The complexities involved, such as family dynamics, cognitive decline, and the aging advisor population
- The value of human advisors in providing emotional support and guidance beyond just investment management
- The challenges of attracting more women and younger professionals into the industry.
Discussion:
There is a significant amount of wealth expected to be transferred in the coming decades, with estimates of £100 billion per year in the UK until 2046. Contrasts with the UK's inheritance tax policies were made with those in the US, noting the UK's relatively high inheritance tax rate and low thresholds.
Challenges and complexities
Challenges and complexities involved in managing intergenerational wealth transfer include family dynamics, cognitive decline, the aging adviser population, and the need to engage with clients' families and spouses.
Statistics on the high percentage of women who fire their spouse's advisor after their death and the risk of losing a significant portion of a firm's book of business were cited, as well as the difficulties of discussing sensitive topics like death and inheritance with clients.
The value of human advisers
The value of human advisers in providing emotional support and guidance beyond just investment management was emphasised, with the importance of treating clients as families rather than individuals and building trust and communication highlighted. The need for advisers to adapt their approach to better serve the next generation of clients, who may have different expectations and priorities was also discussed.
Attracting talent and diversity
When it comes to the challenges of attracting more women and younger professionals into the wealth management industry, the industry's aging adviser population and the need to appeal to a more diverse talent pool should be considered. Initiatives by firms like Bank of America to increase diversity and suggests strategies such as return-to-work programs and engaging with universities were then discussed.
Key takeaways:
- Engage with clients' families and spouses to build trust and communication
- Adapt approach to better serve the next generation of clients with different expectations and priorities
- Explore strategies to attract more women and younger professionals into the wealth management industry, such as return-to-work programs and engaging with universities
- Provide emotional support and guidance beyond just investment management to clients navigating intergenerational wealth transfer
- Educate clients on the complexities of inheritance tax policies and the importance of proper planning
