Let's imagine the financial world of an individual aged say 40 years old or under.

    Everything is online. They manage their banking via an app.

    They research everything themselves before committing to subscribing to a service or, if they have to, buying a product.

    They are very familiar with Martin Lewis and the Moneysavingexpert.com financial website.

    Via bank accounts and apps, they're able to round up their spending to the nearest pound so that it automatically gets saved or invested.

    Their workplace pension is online, and the Isa they regularly save into is managed by an algorithm, again via an app.

    So why on earth would they need a financial planner?

    That’s not a question I would normally engage with, loaded as it is with undertones of hostility.

    Short of perhaps recommending a few cashback websites or reward credit cards, and providing some education around investment, tax and pensions, you might argue there's little value a financial planner could add for an individual in this situation.

    However, I’m not about to exclude a whole section of the population from our services, because I believe that they need them.

    Duty of care

    First and foremost, we need to look at the bigger picture.

    This graph from the Office for National Statistics' wealth and assets survey shows the distribution of wealth by age group between April 2016 and March 2018.

    ONS wealth data

    (click here for a downloadable version of the graph)

    Predictably, we see that those in the so-called millennial bracket (those aged 16 to 44 in this case) have much higher bars in the colours that denote less wealth, while those aged 45 and over are more likely to be wealthier.

    So why is that important for serving younger people?

    Quite simply, it comes down to planning.

    When someone experiences a death in the family, one of their first calls shouldn’t be to someone they’re unfamiliar with.

    Clients are often parents and grandparents, so as their financial planner we should be planning for this now. 

    I believe the idea of intergenerational wealth planning needs to form a core part of the financial planning service.

    What’s the point in recommending carefully planned inheritance tax solutions for your clients, for the next generation to not be in a position to manage their hard-earned inheritance in the best possible way?

    What we can do as planners

    As financial planners, we have a duty to educate not just our clients, but the next generation of clients.

    Arguably, we also have a duty to develop a service (and perhaps a non-percentage based charging model to go with that service) that would be valued by younger clients.

    By investing in that service now, this will benefit our existing clients and ultimately our relationship with the family as a whole.

    There are things we can consider doing to broaden our reach to younger people. 

    These might include:

    • Chairing family meetings
    • Developing educational material, videos and courses
    • Helping to embed a saving discipline, perhaps through budgeting tools
    • Reviewing covering letters and CVs for those starting out in their careers
    • Discussing business ideas and providing support for new or prospective business owners
    • Recommending relevant fintech apps

    There can be a perception that the younger generations are more entitled, and so difficult to work with. But these are the clients of the future in our profession.

    Why not extend an invite to a review meeting beyond the individual client or couple, but to the whole family?

    For me, this isn't about a strategy to preserve assets under management, or seeing the children of your clients as prospects. It’s much more important than that.

    Think about the families you serve. Think about how much your clients will get out of knowing the next generation will experience the benefits of true financial planning, in the same way that they have.

    Start the discussion

    Add a comment