Generational planning is a crucial way for independent financial advisers to futureproof their business as, handled well, it leads naturally to evolving and long-lasting client relationships. It requires a genuine client-centred approach in which you can demonstrate your care for the interplay across the generations of a family, using your skills to understand their unique needs and explore their best options. It’s not a question of seeking family referrals but goes far deeper than that, in terms of working with clients and beneficiaries together and really getting to know them.
Some interesting research has been carried out by the Institute for Fiscal Studies, drawing comparisons about the relative inheritance expectations across various demographics. In general, younger generations are set to gain much greater legacies than their forebears, partly as a result of more home ownership and rising house prices. Conversely, younger people today find it harder to accumulate wealth and own property, and inherited wealth may be especially important to them. People who are already well-off will also tend to inherit more; in fact, inequalities will be on the increase.
This gives scope for promoting a generational planning approach to your advice, and the sooner this can be instigated, the better. It’s well worth establishing this cross-generation relationship and way of working in advance of life-changing events taking place. With the foundations of a sound and trusting relationship laid, it will be so much easier for clients, beneficiaries and all concerned to have peace of mind, however circumstances evolve. And from a business perspective, the IFA benefits from a natural progression to continue giving advice to the younger generations.