New white paper from Charles Stanley aims to help advisers with intergenerational planning
by Sue Whitbread
- 25% of UK adults intend to spend as much of their assets as they can while they are still alive
- 42% intend to make significant lifetime gifts to their families
- Advisers reveal clients’ top wealth desire is to provide a legacy for their family
- Over a quarter (27%) of British adults claim to have never discussed their personal finances with their parents
A quarter (25%) of UK adults intend to spend as much of their assets as they can while they are still alive, according to the ‘Book of Stories 2.0’, a new white paper by wealth manager Charles Stanley, which aims to help advisers navigate the challenges of intergenerational wealth transfer and engage the next generation of clients.
Most British adults, however, do expect to pass on most of their wealth to family and loved ones. Nearly half (46%) intend to do so after they pass away, but the ‘Book of Stories 2.0’ also reveals that there is a growing trend for lifetime giving, with 42% of adults saying that they intend to make significant lifetime gifts to their families.
Some choose this option to save inheritance tax for the benefit of the next generation, often to the potential detriment of their own financial security. For others trying to mitigate inheritance tax is a low priority and they simply get a lot of pleasure out of giving during their lifetime and want to be able to see the tangible benefits to their families. Many advisers see it as their duty to encourage their older clients to spend more of their money on themselves, a move which is very often supported by the children.
Over a quarter (26%) of UK based advisers say that the top priority for their clients is to provide a legacy for their family and to leave the next generation better off, often putting their families’ needs above their own. This ambition is more important than having a high standard of living in retirement or having the freedom not to work (22% cited both these options).
Despite the importance of these decisions and the often-significant sums involved, over a quarter of British adults (27%) have never discussed the topic of personal finances with their parents.
John Porteous, Group Head of Distribution, Charles Stanley said:
“While some people want to spend as much of their money as possible during their lifetime, there’s no doubt that passing on a legacy and making sure that children and grandchildren are well provided for is a priority, with the number of people considering lifetime giving increasing. However, longevity means that advisers need to ensure their clients have robust financial foundations for their old age, while for the next generation inheritances are coming later in life. This means they are torn between encouraging older clients to spend more on themselves and their desire to help the younger generations while they are still alive.
“Some clients’ attitudes change as they grow older and their families become bigger. So, it is important for advisers to raise the issue from time to time to make sure that events haven’t prompted a change in their wishes or a desire to take further action with respect to IHT or general estate planning. This will help create opportunities for those advisers who can help client families open up conversations and talk about money to define and reconcile their priorities and aims.”
Visit www.charles-stanley.co.uk/advisers/book-of-stories to get a free copy of the ‘Book of Stories 2.0’ whitepaper. It is designed to help advisers understand and engage with the next generation and consider the changes to working practices needed to succeed in the intergenerational planning environment.