The emotional dynamics associated with the transfer of clients’ wealth | Practical tips from CFA Institute’s Hayman

In this insight for IFA Magazine, Genevieve Hayman, Senior Research Affiliate in Research, Advocacy, and Standards at CFA Institute, shares practical tips to help advisers support successful wealth transfer for clients

The transfer of wealth and control from one generation to the next is one of the most consequential moments in a family’s life, and one of the most misunderstood in business. Too often, it is treated as a technical exercise: a matter of wills, trusts, and tax efficiency. In reality it is a profoundly human transition, shaped as much by identity, relationships, and emotion as by balance sheets.

For advisers working with UK families, this distinction matters. Because the point at which wealth and control change hands is also when families are most exposed: financially, legally, and emotionally. And yet, the people who will carry the responsibility forward – spouses and children – are frequently absent from the most important conversations.

This gap matters most at a time when £7 trillion will carry over from one generation to the next in the coming decades. Yet most advice providers have historically failed to convert new inheritors into clients. Without meaningful change, this pattern is likely to continue as assets change hands.

Part of the issue lies with misunderstanding what the wealth transfer means. Succession should be seen as an identity transition, not just a governance process. One of the most persistent myths in legacy planning is that founders delay because they are too busy. In practice, the hesitation is often psychological. Letting go of control can feel like letting go of purpose, status, and even self.

Family business research has long highlighted that succession is not merely a procedural challenge. It is an identity conflict. When the roles of owner, leader, and parent overlap, stepping back can create uncertainty not just about who does what, but about who one is. Advisers who ignore this dynamic risk misdiagnosing the problem entirely.

The emotional complexity does not stop with the incumbent generation. For heirs, inheritance is rarely a simple financial gain. It can arrive intertwined with grief, obligation, and pressure, particularly where responsibilities such as executor or attorney are unclear until a moment of crisis. UK regulators now explicitly recognise bereavement as a potential source of financial vulnerability, affecting decision-making capacity at precisely the wrong time.

This is where advisers can add real value, not by avoiding these tensions, but by naming them. Bringing spouses and children into the conversation, for example, is not a courtesy; it is a stabilising force. In many families, they are uniquely positioned to bridge the gap between business and personal dynamics. Excluding them is not discretion, it is risk.

Despite growing awareness, several predictable errors continue to undermine wealth transfers.

First, families routinely exclude spouses and adult children from substantive discussions. But research demonstrates these parties want to be involved. According to recent CFA Institute survey, 75% of wealthy investors expressed interest in advice on facilitating financial discussions with family members, including four out of every five Gen Z and millennial respondent. Failing to prepare these primary recipients of wealth transfers, and therefore, the next decision-makers, is not only a disservice to current clients but also denying service to future ones.

Second, there is a persistent assumption that “equal” means “fair.” In practice, fairness is contextual. One child may be active in the family business; another may not. Caregiving roles, personal circumstances, and contributions differ. The real danger is not unequal outcomes but unexpected ones. Evidence shows that many parents who plan unequal distributions never communicate this to their children. When combined with grief, that lack of transparency can be combustible.

Third, readiness is too often assumed rather than tested. Research found that wealthy Gen Z and millennials are very confident in their investing abilities, and to a lesser extent, estate planning. But confidence is not the same as preparedness, and parents may harbour doubts or concerns. Both perspectives can be true. A windfall changes behaviour, sometimes subtly, sometimes materially. Economic research consistently shows that increased wealth can alter incentives, including attitudes to work and risk. Preparation, not assumption, should be the adviser’s focus.

Fourth, too many families treat succession as a single event rather than a process. Family dynamics and shifting roles following the wealth transfer can be just as volatile as pre-transfer. Around three-quarters of surveyed Gen Z and millennials, in particular, want help after a significant liquidity event such as receiving an inheritance and managing trust options and implications. Research has also shown that for inheriting a family business, post-succession is a critical time when new leaders are navigating their new identities.    

Finally, advisers underestimate how values shift across generations, and, in some cases, across genders. Younger cohorts are placing greater emphasis on purpose, sustainability, and well-being alongside financial returns. These are not “soft” preferences; they shape investment strategy, governance, and definitions of success. CFA Institute research found that over 90% of surveyed Gen Z and millennials considered it important to align their portfolio with personal values, and 43% expressed active interest in values-driven or impact investments – higher than previous generations. At the same time, differences in risk tolerance and decision-making styles within families mean that a one-size-fits-all approach is unlikely to hold.

Governance that survives beyond the founder

As families grow, informal methods stop scaling. What worked for a founder and a small group of stakeholders rarely survives into the second and third generations without structure.

This is where family governance, and in particular, a family charter, becomes essential. At its best, a charter is not a legal document but a shared framework: a clear articulation of values, roles, and processes that sits alongside formal legal arrangements.

The distinction matters. Values and intent belong in the charter; binding obligations belong in legal documents. When the two are misaligned, disputes are almost inevitable.

A well-constructed governance framework should answer the questions families are most likely to postpone: Who makes which decisions? How are conflicts resolved? What are the rules for entering or exiting roles within a family enterprise? How will the next generation be prepared for responsibility?

Crucially, a charter should be treated as a living document – something that evolves as the family and its assets evolve. It is not a one-off exercise but an ongoing discipline. When done well, it becomes a neutral reference point: an agreed foundation established in calm moments that can guide decisions when emotions run high.

The practical implications for advisers are clear. Start early, and treat spouses and beneficiaries as stakeholders, not spectators. Build relationships before they are needed, not during a crisis. Create clarity around roles and responsibilities well in advance. Who will act as executor? Who holds power of attorney? What decisions will fall to whom? These are not administrative details, they are sources of potential conflict if left unresolved.

Establish a cadence of intergenerational conversations. One-off meetings are insufficient. Young generations, in particular, will expect frequent check-ins across multiple platforms, whether email, video calls, in-person, or messaging apps. All of these touchpoints work to create an environment of familiarity, trust, and shared understanding that is built over time.

Finally, recognise that values are changing. Aligning investment strategies and governance structures with those values is not about appeasement but relevance and longevity.

Successful wealth transfer is not ultimately defined by facilitating transactions or tax efficiency. It is defined by continuity of purpose, of relationships, and of stewardship. Advisers who understand this can help families navigate one of the most important transitions they will ever face.