The Wealth of families - has the pandemic prompted further considerations?
Experts: Darren Wardman, Business Development Manager – North, Quilter and Scott Harrison, Regional Manager – North, Quilter
Facilitator: Martyn Laverick, Divisional Director of Mergers & Acquisitions, Paul Harper Search & Selection
Key Takeaways:
- Advisers are not yet fully engaged with the family members. This is seen to be critical in order to retain assets and fees.
- Money passed down generations will often be invested elsewhere depending on the age of the beneficiaries.
- A fuller range of services is seen as a way of attracting and retaining younger beneficiaries.
- Younger advisers were seen to be key in dealing with the younger members of the family group
- A key link between extended family members was Will planning and this was seen as a good way of engaging with all family members. The recent pandemic has highlighted the importance of Will planning amongst families.
Context:
Advisers are not yet fully engaged with the family members. This is seen to be critical in order to retain assets and fees.
Across both sessions it was only the minority of firms that had in place specific plans/services to deal with the family unit and to offer different services to different generations. This could be down to the fact that many firms did not see the opportunity in this and instead saw that if they did anything at best this would help them retain assets rather than grow their business.
Money passed down generations will often be invested elsewhere depending on the age of the beneficiaries
The age of the beneficiary receiving the inheritance plays a big part in how the inheritance is used. It was the experience of the audience that there was a tipping point in the ‘older’ recipients. Those over the age of c65, or already in retirement tended to look at passing the inheritance onto their children first as they were already financially secure. Those in their 50’s tended to look to keep the inheritance themselves in order to build up their own assets ahead of retirement. This highlights the importance of having a relationship with the children of your ‘older’ clients as a starting point.
A fuller range of services is seen as a way of attracting and retaining younger beneficiaries
There were some good examples of firms that have put in place new services aimed at a younger audience but also as a way of engaging with the children of existing clients. These ranged from financial education services, online services, mortgages and legal services. In some cases, firms provided advice to the children at no extra cost to the client up to a certain age. All these services were used to start the journey of engaging with the children of existing clients however at some stage they could also be seen as ways of attracting new younger clients who will in turn inherit themselves.
Younger advisers were seen to be key in dealing with the younger members of the family group
This is always an interesting debate with some stating they were quite comfortable dealing with younger people whilst others were seeing success putting in younger advisers to deal with the younger family members. Where firms were employing younger advisers in some cases the younger adviser shadowed an older adviser in family meetings and then took overlooking after the younger clients. An observation is that whilst we may feel comfortable talking to the younger clients, bearing in mind the average age of an adviser is in the region of 57 yrs, the statistics show that a large percentage of the children of clients do not use their parent’s advisers when inheriting money. We should not ignore the fact that the younger audience may well want to engage with us differently and with individuals that they feel they have more in common with.
A key link between extended family members was Will planning and this was seen as a good way of engaging with all family members. The recent pandemic has highlighted the importance of Will planning amongst families
This was one service that was highlighted several times as being a highly effective method of starting discussions with the wider family members. The pandemic has highlighted how important this is not just for the parents but also for the children as well. Some firms have formed formal links with legal firms to offer this service as they now see it as a key part of their offering. In addition, it also opens up the opportunity of working with the younger members of the family on their own will as well as their own protection needs which the current climate has highlighted.
