In late 2019 we asked advisers whether and how the increase in intergenerational wealth transfer is affecting how they work with clients in retirement. Several highlighted scenarios where good communication between and with the different generations is vital:
“It’s probably having more effect on their children; we are trying to get closer to them from a business perspective but it’s useful to both the clients and their offspring. That’s probably the main change and we’re introducing a light-touch service to deal with children who are roughly in their 40s and 50s. Rather than just see assets walk out the door when a client dies, this lets us get a feel for what the children want and helps us build a picture of the wider family and even get a sense of their involvement in any long-term care issues that might arise.”
“We work with a number of families. Sometimes we work with a child who will refer us to a parent, or vice versa. The main thing is to ensure you’re talking to at least the two generations where there is a wealth transfer. It’s important when talking about IHT and estate planning that both sides are aware of what’s being done and what needs to be done.”
“We find that quite a lot of our younger clients are unsure about whether to factor in a potential inheritance from their parents. Those who do factor this in are less likely to appreciate the way in which long-term care costs can decimate the value of a parent’s estate. And, to add further complications, this is actually almost impossible to asses unless the parents’ estate values are known and, ideally, they are party to the financial planning process.”