How we are evolving into an intergenerational advisor

Recently I was being interviewed by a Channel 7 television report for a small spot on the evening news, when in passing, Jackie asked me what type of financial planning advice I offered clients.

It made me pause and think.

Typically, in the past I would answer that I provide sensible down-to-earth advice to clients either in retirement or planning their retirement and in saying that I felt it was a fair summation of what we do.

Jackie’s question though made me stop and think. Increasingly I am helping clients, often who have been with me for 20 years or more, navigate a way forward in finding a successful way of leaving their wealth to their children. It’s a very big task.

The Commonwealth Bank of Australia recently estimated there is about $3.5 trillion in baby-boomer wealth that will be transferred to younger Australians over the next two decades.

While I am only involved with a tiny fraction of that amount, it highlights how pervasive and significant this shift in generational wealth will be. Of course, starting this conversation within a family is not always easy.

Most of the adults receiving this wealth are themselves adults and may already be retired themselves. Many don’t feel they need any advice in managing their affairs and many will be right, but others will suffer the consequence of poor planning.

Sometimes, successful planning is just ensuring children themselves are well set up in terms of their superannuation and housing, in other situations it’s about ensuring that children are provided for according to their needs.

Perhaps there is a specific asset, a property or a business that should be kept within the family and it’s about protecting that assets from separating partners and compensating others in the family who have not shared in that particular asset.

It might be formalising conversations held over kitchen tables about who should get what in regard to jewellery and furniture through to property and shareholdings, so future discussions don’t lead to expensive legal fights.

Increasingly, and something that is often overlooked, is ensuring that important documents such as wills and trust deeds are located along side much needed passwords which can be accessed at the right time.

Of course, no two families are alike and it’s rare that a standard solution can be applied to all.

However, having us stand by and be there guiding and advising can be a big comfort not just to parents who are passing on the assets as much as to children aware of the benefit of their inheritance will bring them and are unsure how to manage it.