As HNW investors grow wealthier, they’re increasingly using trusts to effectively transfer their wealth between generations. Research suggests HNW investors are using a trust structure to protect their wealth or effectively transfer it to their family1. But only a small proportion use an administrator, trustee service provider or investment platform to manage it. There is also a growing gap in intergeneration planning advice with less than half of HNW investors who use advisers, currently receiving it.
Advisers could provide more clients with intergeneration planning as part of their advice offering. This may also present an opportunity to develop new relationships with family members.
Australia is on the verge of its largest handover of wealth – an estimated $3.5 trillion worth – to be transferred from baby boomers to younger generations in the next 20 years2. As a result, financial advisers will have to prepare for an influx of new customers. Approximately 70% of financial advice clients are over the age of 503. By contrast relatively few millennials (7%) have ever worked with a financial adviser.
There is an opportunity to assist baby boomers in deciding how they transfer their assets – both money and property – who they want to give it to, and how to protect their legacies. Working with millennials as they inherit their parents’ wealth will also involve building new relationships with a new generation – who no doubt will have another set of advice needs.
1 Investment Trends – September 2020 High Net Worth Investor Report 2020 High Net Worth Investor Report_Nabtrade (002).pdf
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