Research finds people are reluctant to discuss their finances openly, highlighting the crucial role that advisers can play in helping to start those difficult conversations
The number of people turning to financial advisers to help them support family members and secure their own future has risen sharply as cost-of-living pressures intensify, according to M&G Wealth’s third annual Family Wealth Unlocked report.
The report, which questioned 2,000 people who have previously taken financial advice, finds that more than 70 per cent across all age groups are concerned about rising inflation and interest rates. This has prompted a jump in the numbers seeking advice, from 29 per cent in the previous report to 40 per cent today. And as people focus more on how to support their wider family against today’s difficult economic backdrop, the report shows that 45 per cent of families are sharing the same adviser across multiple family members, up 5 percentage points on 2022.
It’s not just about tax
“When you talk about intergenerational planning, a lot of people automatically assume the main focus is tax,” says Vince Smith-Hughes, M&G Wealth’s director of specialist business support. “But we had really strong feedback this year that people are concerned about their families in the current environment and want to take care of them, but with control of funds still being a primary concern.”
The number one reason people gave for sharing an adviser with other generations was “it’s best for the family”. Reducing tax bills came some way behind.
The report shows that gifting – a common reason to seek financial advice – has become more widespread as financial pressures bite, with 84 per cent of people saying they had received a financial gift in the past year, up from 77 per cent in 2022. However, the research also highlighted how cost-of-living pressures have made it more difficult for families to discuss their finances openly, with the proportion doing so down from 80 per cent in 2022 to 64 per cent this year. One-in-five people report that they have stopped talking about money completely since the cost-of-living crisis began.
Addressing complex situations
This highlights the vital role that advisers can play in helping families discuss their financial situation and make plans to help both children looking to establish their independence and elderly relatives facing rising living costs. This kind of holistic intergenerational planning needs buy-in from everyone involved. When family life is becoming more complex, due to factors such as divorce and remarriage that bring together children from more than one relationship in what are termed “blended families”, advisers can play a crucial role.
This is illustrated by the finding that 47 per cent of blended families share a financial adviser among several family members, compared with 42 per cent of non-blended families. Similarly, the advisory skills that families value most are impartiality, both in terms of product and platform recommendations and between family members (37 per cent), and “understanding my family situation”, which ranked alongside price on 29 per cent.
