Money and death are generally not topics people like to talk about. Especially not when your own family is involved.
But advisers warn that such discussions are necessary, as difficult and harrowing as they may be, they require each generation to sit down together and discuss their attitudes and intentions regarding wealth and inheritance.
According to the King’s Court Trust, wealth transfers worth £5.5 trillion are set to take place over the next 30 years. With such dramatic wealth transfers already beginning to occur, how can we broach this sensitive issue to ensure a positive outcome for all involved?
And when addressing this issue, how can advisors and their clients bridge the vast differences in generational opinions and economic outlooks?
Jessica Franks, head of investment products at Octopus Investments, says the first step is to identify what different generations believe and feel about their money.
She explains that older people often feel that they have carefully accumulated wealth, so fearing that their money will be used in ways they don’t agree with can make them reluctant to inherit that wealth. They are often passive.
According to Franks, “This is typically characterized by money being wasted on luxuries rather than being invested for the future.”
Franks said this view is shared by financial advisers. “A survey of 200 UK advisers in June this year found that the main reason for not retaining the assets of a deceased client’s beneficiaries was that they believed the beneficiaries wanted to use the estate. (68%)”
But to really start having meaningful conversations, advisors may need to break this belief.
Franks added: “Our research also included the views of 1,000 UK adults whose investments are partially or fully managed by an adviser, and we asked people aged 18-34 about their future plans. 72% said they would be invested if they had inherited money.”If they had inherited money, they would be more likely to invest it. ”
Not only are Gen Z open to saving money, they also seem to be open to conversations about money. A Standard Life survey earlier this year found:
Budgeting out loud is gaining popularity as the majority of Gen Zers feel comfortable talking about money with friends (61 percent) and family (71 percent) 10 Gen Z adults Seven in three (68 percent) of Gen Zers are refusing social activities because of their financial situation, and 49 percent of Gen Zers are cutting back on discretionary spending to save for financial goals.
Franks emphasizes that advisers can play a role in ensuring young beneficiaries have sufficient financial knowledge and access to financial advice.
