The £5 trillion opportunity

Let’s talk money. Britain’s financial advisers currently look after £1.65 trillion in private savings and investments. Yet there could be even more funds and fees up for grabs as more than three times that figure (£5.5 trillion) is estimated to pass between the generations over the next 30 years.

One of the reasons why this intergenerational wealth transfer could be such a big opportunity for financial advisers, is that property is expected to account for 70% of the assets being bequeathed. As the bulk of the recipients are likely to have homes of their own, most of these properties will be put up for sale and turned into cash. Financial advisers can expect an upsurge in investable funds and demand for financial advice, not only from existing clients, but also their children, grandchildren and other beneficiaries.

Yet, as enticing as this vast new pot of investment could be, it’s only part of the game-changing commercial potential. As I explored in an earlier article, this is also a chance for financial advisers to enhance client outcomes and strengthen relationships by helping them prepare for this transfer in the most informed, effective and sensitive way.

Families naturally want their wealth to benefit loved ones when they need it most, from the deposit on a child’s first flat, to nursing care for a parent or grandparent. They also want the money to stay in the family rather than being swallowed up in inheritance tax. By taking a holistic cross-generational approach to estate planning, you can not only boost loyalty among existing clients, but also develop valued professional relationships with their children and grandchildren.

Today’s ever more complex demands

So, how can you capitalise on the unfolding opportunities? For me, the key starting point is to think about how peoples’ needs are changing and what they expect from you as they live longer and family relationships become increasingly complicated. You’re now likely to be receiving ever more complex client questions and requests as a result.

To provide a taste of the complex financial quandaries facing many people today, we at Stellar Asset Management have launched a series of webinars and client case studies based on real life family situations. The challenges stretch from a business owner with health worries who wants to secure the financial future for herself, her partner and her children, to a father who wants to make sure his children fully benefit from his wealth after his ex-wife marries again. We are regularly preparing content, case studies and client stories to our growing resource centre for advisers to use with their clients.

However, none of this is straightforward. Such individual and multi-faceted demands often require customised solutions – one-size-fits-all estate planning isn’t going to provide the best possible outcome. A whole series of valuable, but often under-utilised, options such as business relief, business asset disposal relief or R&D tax credits (to name but a few) could all come into play in delivering the ideal solution.

These complex cases will often require more advice than you can deliver on your own – you would ideally need specialist support in areas such as a business sale or family law. While this remains your client, you are the orchestrator, as well as the direct adviser.

Trusted partner through the generations

The other big shift in thinking is adopting a multigenerational perspective. To deliver the ideal outcomes, it’s important both to understand and balance the needs and aspirations of what could be five or more generations in a family. Your advice and support would also evolve as each generation moves through the various life stages.

For example, the family members approaching retirement are likely to have the most complex financial and estate planning demands. But you can also be thinking about how to build relationships and serve the generations that will inherit in the future. This could range from providing financial coaching for teenage children, to supporting increased tax efficient planning in midlife, right through to helping to plan and manage nursing care in later life.

Cutting across these evolving demands is the importance of engagement and understanding. This personalised and cross-generational approach calls for real insight into the hopes, dreams and quirks of all the family members. From enhancing connections and financial projections to real-time reporting, technology can clearly help. But it can’t replace the need to get closer to your clients and professional partners.

Helping you to deliver

At Stellar, our aim is help you deliver the best outcomes for your clients and align your recommendations with their individual needs. This includes helping you to create a unique estate plan for each client and their family, which reflects their circumstances today, while adjusting to provide flexibility and choice in the future.

We can also provide a gateway to a broader set of specialist expertise through the expanding Stellar Partner Services. And unlike conventional estate planning solutions, your clients can retain full control over their capital for the remainder of their lives. While you continue to own the client relationship and retain full control of the advice process, the benefits include being able to tackle complicated client demands and create a ‘virtual family office’ serving each generation.

In the next article in this series, my colleague Daryl Hine will be looking at how to engage more closely with clients, whilst boosting collaboration and choice. In the meantime, if you would like to discuss any of the issues raised in this article or to find out how we could help you to enhance outcomes for your clients, please feel free to get in touch.

Limited time offer – Zero initial fee

Our asset backed team is working on a large number of opportunities, many of which have come to us off-market and through our extensive network of partners.

We do not wish to miss out and have waived our initial fees from 1 October to 30 November 2021 for all investors (excluding AiM services) so that we can secure these projects as quickly as possible.

Click the link below to find out more about this limited time offer and the services your clients could save on.

Written by Matthew Steiner

Important Information

Stellar Asset Management Limited does not offer investment or tax advice or make recommendations regarding investments. Prospective investors should ensure that they read the brochure and fully understand the risk factors before making any investment decision. The value of investments and the income from them may fall as well as rise and is not guaranteed. No assurance or guarantee is given that any targeted returns will be achieved. Forecasts of potential future results are not a reliable indicator of actual future results.

Stellar Asset Management Limited of Kendal House, 1 Conduit Street, London W1S 2XA is authorised and regulated by the Financial Conduct Authority.