This presents a major opportunity for advisers to help Australians pass on wealth with certainty while building lasting client relationships across multiple generations. After all, leaving wealth to those that matter most is one of the most emotional life goals Australians will ever work towards. It’s about safeguarding a family’s future, preserving their legacies, and ensuring any hard-earned wealth can be controlled across generations.
However, advisers also need to ensure that they preserve relationships with families, so that their financial advice doesn’t stop once a current client passes. According to research from CoreData, advisers lose, on average, two-thirds of funds under advice (FUA) as money moves between generations.
Nurturing relationships beyond core clients
How can advisers ensure they don’t impact the future of their business in this case? Opening up and building relationships with the next generation is key – and wealth transfer conversations offer a natural entry point. Advisers who seize this opportunity can strengthen family ties that should be likely to result in continuity of advice across generations.
While the impending expected wealth transfer sum is significant, our data has shown that there is a gap between people’s intentions to involve their children in wealth transfer plans and their actions. Nearly two-thirds (65 per cent) of respondents intend to involve their children in the conversations with their financial advisers, but in reality, the vast majority of advisers indicate that less than 10 per cent of their clients are actually involving their children.
Advisers need to capitalise on the opportunity here: encouraging clients to bring beneficiaries of wealth transfers into conversations as early on as possible will ensure that there is ample opportunity for the next generation to see the benefits of receiving financial advice.
Encouraging and initiating conversations across generations
It can be difficult to know when the right time is to start bringing younger generations into such big financial conversations, so it’s important to use your client as a guide. However, it’s a good idea to get a sense from the client about the financial literacy of their intended beneficiaries. This could start the process of wealth transfer conversations, by suggesting and supporting beneficiaries with some financial education where necessary.
This all helps build trust, which is an essential part of starting to approach conversations with younger generations. Any conversation around wealth transfer is going to be sensitive – it’s certainly not the regular conversation a family might have around the dinner table – so it’s vital that advisers handle this delicately throughout. It could be useful to approach this as family wealth planning more broadly, rather than just a wealth transfer. That way, the conversation is geared less towards having to think of a loved one dying, and more about ensuring that all family members are setting up for financial successes.
The main goal here is to facilitate open conversations that then create the opportunity for advisers to bring other generations under their advice wing. It’s then a case of looking at what the right approach is for that beneficiary and the goals they’re working towards, whether that’s buying a house, paying for school fees or saving for retirement.
These conversations are even more crucial when more complex family structures are at play, like blended families. Fostering early, transparent dialogue builds trust and can make the wealth transition process smoother and more collaborative.
Intergenerational wealth transfer goes beyond simply handing down assets – it’s about passing on financial confidence and creating a legacy of security and informed decision making. Financial advisers who take the time to understand their clients’ goals and family dynamics, build trust and encourage open dialogue, can be instrumental in helping families navigate the complexities of this transition. It’s not just valuable for your clients, it’s essential for the long-term success of any advice business.
Felipe Araujo, CEO at Generation Life
Fantastic article. Bridging communication gaps in family wealth isn’t just about conversations. It’s about having structured, accessible systems that make those conversations easier and more meaningful over time. Loved your insights Felipe.