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New research from TIME Investments highlights the risk to advisers posed by intergenerational wealth transfer

by | Aug 3, 2023

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A new report ‘The Intergenerational Wealth Report’ by TIME Investments, which specialises in tax-efficient investment services, reveals that although Millennials and Generation Z earning over £50,000 per annum have a high propensity to seek financial advice, many will switch advisers following the inheritance of managed assets, putting AUM at risk. 

To understand the potential scale of future wealth transfer and the attitudes and intentions of younger investors, TIME Investments commissioned unique research by surveying 500 people, 250 Generation Z aged between 18 and 26, and 250 Millennials aged between 27 to 42, all with annual incomes of £50,000 and above. To understand how advisers are serving these younger clients, research was also carried out with 125 UK professional financial and wealth advisers.2 

The research reveals that 60% of Millennials and Generation Z surveyed are expecting an inheritance from their parents or other family members.1 These sums are significant with 19% expecting to receive more than £600,000, 14% between £400,000 and £600,000, and one in five expecting to inherit between £200,000 and £400,000.1 16% anticipate an inheritance of £100,000 to £200,000 and 17% expect to inherit up to £100,000.

 
 

How much Millennials and Generation Z expect to inherit 

  • Over £1 million – 9% 
  • £600,000 to £1 million – 10% 
  • £400,000 to £600,000 – 14% 
  • £200,000 to £400,000 – 20% 
  • £100,000 to £200,000 – 16% 
  • Under £100,000 – 17% 
  • Don’t know – 14%

Source: TIME Investments 

However, the findings also reveal a significant challenge to advisers as many of those set to inherit do not have a relationship with the advisers who currently manages these assets. Just under half (47.5%) do have a relationship with the adviser used by the family members they are expecting to receive an inheritance from.1 

 
 

Positively, some 46% of those that don’t have a relationship said they would continue to use the same adviser when the wealth is transferred to them, compared to only 28% who said they won’t use them.1 A further 26% said they don’t know who they will use, suggesting they are open-minded either way, presenting an open-door opportunity for advisers to make them clients.

More concerningly, the proportion of inherited assets this age group is likely to leave with the same adviser is low. One fifth said they wouldn’t leave any assets with the adviser and just 4% said they would leave all the assets with them.1 

Commenting on the study, Tom Mullard, Business Line Director (Tax).at TIME Investments, said: “Our report shows that Generation Z and Millennials earning over £50,000 per annum have an eye to the future and are actively engaged in saving and long-term financial and inheritance planning. They are financially savvy but also very much open to advice. 

 
 

“Almost half (56%) are already using a financial adviser to help them on this journey, seeking guidance on different aspects of their finances.1 However, the findings also clearly show that at the point of intergenerational wealth transfer, there are gaps in interactions that the adviser community needs to address to prevent the potential loss of significant AUM. Here, engagement is key and finding new ways of making advice accessible, relevant and ensuring it adds value is crucial.” To download the report, visit https://content.time-investments.com/intergen-wealth-report

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