Embark Investor Confidence Barometer

Advisers must act as £5.5trn intergenerational wealth trickles down

Clients’ partners twice as likely to ask for introduction than advisers
Female advisers show the way on intergenerational connections
Only tenth retain services of partners or children for vast majority of clients

Adviser readiness for what is expected to be an unprecedented wealth transfer between generations in the next 25 years is mixed, according to the latest Embark Investor Confidence Barometer.

While more than two-thirds (68%) of advisers said they recognised the importance of building relationships with clients’ partners or relatives, few advisers are proactively doing so.

According to Kings Court Trust, £5.5trn* is expected to pass between generations in the UK by 2047.

Where advisers have been introduced to clients’ partners or children, it was the clients, rather than the advisers, who tended to kick things off.

According to the Barometer, where an introduction has been made, in less than a fifth of cases did the adviser ask to be introduced.

Both the clients themselves, and in particular the clients’ partners, were significantly more likely to prompt the introduction.

* www.kctrust.co.uk/partner-blog/infographic-intergenerational-wealth

Female advisers show the way

However, hiring more female advisers gives firms a greater chance of building stronger intergenerational connections with clients, the research suggests.

Almost three-quarters of female advisers believe it is important to build relationships with clients’ children and grandchildren, compared with just over half of male advisers (53%).

And this outlook appears to lead to better results: 37% of female advisers said they had established a connection with more than half of their clients’ children, against 26% of male advisers.

It also appears that this leads to a greater chance of retaining business from a client’s child when the client dies: a third (33%) of female advisers said they retain this business for most clients, while 31% of male advisers indicated the same.

Retaining the services of clients’ relatives

Overall, when clients die, advisers are retaining the family’s services – however few say this is the case for a significant majority of clients they deal with.

Around two-thirds of advisers said they retained the services of partners or children for at least half of their clients. However, only around 10% of advisers said they retained the advice services of partners or children for the vast majority of clients who died.

“Advisers are familiar with the benefits of intergenerational planning. By considering the broader family context when dealing with clients, they are deepening existing relationships, building new ones, and creating value in their business.

So it comes as a surprise that relatively few of the connections advisers have established with clients’ partners and children were instigated by the advisers themselves. Instead, according to the Barometer, they were more often started by the client or a relative.

Of course, if clients – or their partners or children – tend to initiate these things perhaps advisers don’t often need to. However, our previous research found the topic of intergenerational planning comes up naturally with clients, especially during initial conversations, so could some advisers be missing a trick here?

It was also interesting to note the differing views male and female advisers had on building intergenerational relationships. This may be another nod to the numerous benefits of hiring more female advisers, with the Barometer suggesting these benefits extend to ESG advice (many more female advisers are confident they understand their clients’ needs on ESG) and even to optimism about the health of the advice market. The results found female advisers are far more confident in their ability to continue to charge enough in the future, with 75% confident against only 53% of male advisers.”

Jackie Leiper
CEO, Embark Group