Five Wealth: Why a multigenerational approach to financial planning matters more than ever

Jordan Wheatley, financial planner at wealth management firm Five Wealth, discusses why a multigenerational approach to planning is key to achieving clients’ long-term goals and ambitions.

In an industry increasingly shaped by demographic shifts, evolving client expectations, and the transfer of wealth between generations, financial planning should no longer be focused on an individual client or decision-maker in isolation.

Instead, a multigenerational approach should be taken – engaging parents, children and sometimes grandchildren as part of a long-term planning relationship. A multigenerational approach is becoming a defining factor for advisers who are prioritising retention, resilience and long-term stability both for the clients and for advisers.

Why younger generations are so often overlooked

Despite the clear rationale, many wealth managers have yet to fully engage younger generations. In part, this reflects the demographics of the adviser community itself. The average age of a UK financial adviser is often cited as being in the late 50s, and many experienced professionals are either at capacity or approaching retirement. For some, there is limited incentive to invest in relationships who may not yet represent material assets under management (AUM).

In other cases, advisers may simply prefer to focus on deepening relationships with existing clients. This is understandable, but it can lead to too narrow a view of the client relationships, and one that does not extend beyond the primary wealth holder.

There is also the broader industry challenge around adapting to changing expectations. Traditional advice models have centred on investments, pensions and tax planning. Younger generations, however, often seek something different – a more holistic relationship that encompasses financial education, life planning and guidance on a wider range of decisions.

This is not a question of a lack of talent within the industry, but rather one of evolution. Firms that are adapting successfully tend to be intentional in how they build relationships across generations – often matching younger clients with advisers who are closer to them in age or outlook. This relatability can be a powerful driver of trust and engagement.

The risk of an individual approach

The consequences of failing to engage younger family members are well documented. It is thought that around 70% of wealth is lost by the second generation, and as much as 90% by the third. While these figures are often repeated, they point to a fundamental issue: wealth is not typically eroded by poor investment performance alone, but by a breakdown in continuity.

If younger family members have no established relationship with their parents’ adviser, they are far more likely to move assets elsewhere when the time comes. If this happens, the adviser and client’s family not only lose AUM, but also the opportunity to guide how that wealth is preserved and transferred.

In high-net-worth families, where wealth structures are often more complex, the risks are higher. Inheritance Tax planning, trusts and long-term investment strategies require a level of understanding and buy-in from all involved. Without early engagement, there is a danger that time spent planning is misunderstood or undone.

Building stronger, longer-lasting relationships

By contrast, embracing a multigenerational approach helps build deeper, more resilient relationships. Engaging younger family members early allows advisers to establish a solid foundation of trust before investments and other financial decisions are made. It also provides reassurance to existing clients, who take comfort in knowing that their family will be supported and protected in the future.

From both the client and adviser perspective, this approach leads to better outcomes. Relationships that span generations are less susceptible to attrition, and assets are better retained as they pass through generations. Rather than facing a point of disruption, wealth transfer becomes a managed and continuous process.

Importantly, as advisers, our role can also evolve in this model. Advisers may facilitate family discussions, host educational seminars, and support younger clients as they navigate key life decisions. In doing so, we often become trusted advisers in the broader sense, and someone that clients turn to not only for financial matters, but for guidance more generally.

In practice, this can lead to relationships that extend beyond the traditional scope of financial planning and wealth management. Younger clients, having built trust early, may seek input on a wider range of issues due to establishing good relationships.

A more deliberate approach to advice

When advisers take a more deliberate approach to how their teams and client relationships are structured, it reaps the benefits. And teams that are made up of a lot of younger advisers, can help to ensure a focus on client relationships early, helping to create a natural bridge between generations and ensure continuity over time.

Matching clients with advisers who are within a similar generational range also helps to build rapport. When clients feel understood, they are more likely to engage openly and develop long-term trust.

For growing firms, this approach also creates an attractive environment for young and emerging talent. Younger advisers are given the opportunity to build meaningful relationships early in their careers, rather than being expected to develop their own client base from scratch. We know first-hand that giving opportunities to all members of the team, supports their development while strengthening the firmwide ability to serve clients across generations.

A more deliberate approach to planning also has clear benefit for clients – knowing that their children have access to their own trusted adviser provides reassurance, particularly in families where wealth is substantial and planning requirements are complex. It ensures that future decisions are made with a full understanding of the nuances of each client and their wider family and ambitions.

Planning for wealth that endures

Ultimately, achieving the successful protection of wealth requires more than technical expertise. It demands a deep understanding of family dynamics, personality nuances, clear communication and a proactive approach to educating and preparing future generations.

A multigenerational approach addresses these challenges directly. By involving the whole family in the planning process from the start, advisers can ensure that intentions are clearly understood, strategies implemented effectively and that transitions are smoothly managed.

For wealth managers, this is not just about future-proofing their own business, but also delivering better outcomes for clients, helping them realise their ambitions for their next chapter, and supporting their families from the beginning.