She adds: “Having a well-organised financial strategy can hugely reduce the stress and upset should one party pass away suddenly (or even not so suddenly) and ensure that all areas have been considered and prepared for, so it’s ‘going through the motions’ rather than anything more dramatic at an already stressful time.”
Once an advisory company has multiple generations of the same family on their books, then the three most common concerns that clients often cite include the desire to create savings, oversee existing investments, and reduce inheritance tax, according to Kusal Ariyawansa, chartered financial planner at Manchester-based Appleton Gerrard Private Wealth Management.
He says: “Clients come with some commonly perceived problems: wanting to build savings, manage existing investments or eliminate inheritance tax. Where they have wanted advice on how best to save an inheritance, an easy path would be to implement a non-income-producing asset in trust for the beneficiaries, whilst retaining your right to income if necessary. A simpler solution would be to make a direct gift, subject to a wide array of suitability.
“If one does not need access to capital — that they are financially secure for life, as evidenced by cash flow modelling — why would you want to spend more to retain control? Bringing in the next generations allows you to see and live that legacy now as opposed to later. At the end of the day, you control nothing after death.”
Unfortunately, another massive hurdle to intergenerational wealth planning is that many advisory companies are not automatically well placed to offer wealth management advice across different generations.
IFA Daniel Elkington says this is because affluent families require more complex legal structures than those that advisers may be used to.
Elkington, director at Lincolnshire-based Keep It Easy Financial Planning, says: “Intergenerational wealth planning is an absolute necessity for any decent advice firm. However, my experiences have been that firms aren’t necessarily well placed to deliver this advice, mainly because for affluent families more complex legal structures, such as family investment companies, are advisable but not part of the suite of regulated products we normally advise on.
“For those families with children, we need to ensure that Junior Isas, Lifetime Isas and other such accounts can be easily established, and unless you’re using a platform that genuinely supports a family model, you’re going to struggle to perform these functions.”
Saving efficiently for the future
Another stumbling block for advisory companies is that many IFAs simply do not want to get involved with intergenerational wealth planning because they do not see it as a profitable part of their business, says IFA Haresh Raghwani.
