Heirs apparent: Tips for intergenerational planning

05 November 2018

Jayson Forrest

Jayson Forrest is the managing editor of Money & Life Magazine.

As intergenerational planning becomes increasingly important, planners explain how they are engaging with the next generation of clients, including meeting their expectations.

Charles Badenach CFP®

Principal and Private Client Adviser, Main Street Financial Solutions

Licensee: Integrity Financial Planners

Engaging with the next generation of clients is an important part of creating a sustainable and growing practice going forward. With the average client attrition rate in the industry of 8 per cent, engaging with the next generation can help offset the impact of this.

When engaging with the next generation of clients, it is important to understand that how you engage with one generation is very different to how you engage with the next generation. To be successful in this area, a practice must have the systems, processes and personnel to do this.

For Baby Boomers, their priority is trust; they are often happy to delegate the decision-making, they undertake their research by word-of-mouth and they share their experiences privately within their own network. On the other hand, Millennials prioritise personalisation; they do their own research, validating this using Google, and share their experiences openly.

We engage with the next generation initially by adding some general items to the client review meeting agenda. This would include issues such as testamentary trusts, binding financial agreements, cash flow modelling apps, the benefit of establishing level insurance premiums at a young age, and innovative savings apps, such as Raiz.

This will lead into other discussions and invariably, the parents encourage the children to come into our office. At that initial meeting, we would normally have a younger ‘Millennial’ or ‘Gen X’ adviser present, who would assume ownership of that relationship going forward.

The expectations of these clients are quite different, as the relationship evolves from initially a ‘sounding board’ to overtime becoming their trusted adviser.


Gil Gordon CFP®

Financial Adviser and Proprietor, RI Lower Hunter

Licensee: RI Advice Group

We have had some success with intergenerational advice (and note, I didn’t say ‘Intergenerational Wealth Transfer’) by engaging the parent and family in a high value estate planning conversation leading into aged care. The ‘Estate Planning For Life’ service we provide comprises five elements:

  1. Facilitation of the right legal documents (wills, PoAs, PoGs, Binding Death Nominations etc);
  2. Maintaining a record of the key information the family needs to act if needed;
  3. A Crisis Plan to guide the family during the difficult times – Who to call? What to ask them? What is important? What can wait?;
  4. A family meeting to make sure all stakeholders understand the elements of the estate plan and their roles within it; and
  5. Regular review to ensure the documents, information and crisis management plan remain up to date.

The first real connection with the next generation happens with stage four and demonstrates a high level of professionalism without risk of being seen to be too ‘salesy’. The kids will engage for three reasons:

  1. The care about their parents;
  2. They probably haven’t dealt with their own planning well;
  3. They are curious about their inheritance.

The value in this approach is it takes estate planning from a single high value conversation for an individual client, into an ongoing high value conversation with a family, especially as the aged care conversation becomes more relevant and the children start to act with the Power of Attorney documentation. Done properly, the centre of gravity changes from the original client to the next generation.


Scott Brouwer CFP®

Director and Financial Planner, Prosperum Wealth

Licensee: Banyan Securities

Intergenerational planning has been a focus for some time, however, the generation we are sourcing is not what we expected.

Our ideal clients are pre-retirees with an average age of 60-65. We continue to try to engage with the children of our clients, but the bulk of the intergeneration advice is being directed towards our client’s parents. Clients who are aged around 60, have parents in their 80s and 90s.

Our clients are increasingly coming to us for advice regarding their parents, as they confront the need for care and the realisation that remaining independent at home may no longer be sustainable. This is always an emotional time for all stakeholders, so seeking professional advice is reassuring and comforting.

Aside from aged care, it is also common for our clients to be inheriting money from their parents. This is leading not only to a variety of opportunities for them personally, but also for their children.

Those clients who we have assisted to be financially comfortable, often seek to assist their children and rather than just gift them the money, they are engaging us to discuss the best method of transferring the money, such as to gift or to lend.

As such, we are also occasionally given the opportunity to provide the children with advice to help them make smart choices with what to do with the money, such as reduce their home loan, rather than buy a jet-ski and new car!

While intergenerational planning is great in theory, from experience we’ve found that it’s often the demise of one generation that leads to the opportunity to assist the next generation.


Troy Theobald CFP®

Director – Financial Services, Robina Financial Solutions

Licensee: Australian Advice Network

Intergenerational wealth transfer is underway. We have the ‘grandparents’, who are probably the original clients. They are now needing our aged care advice business. This is a traumatic time for them. You then have the remaining person in the family home needing the kids (probably in their 60s) to help them through this period. They need someone to help with their investments, Centrelink and to provide reassurance.

The next generation – the ‘kids’ – are dealing with their own retirement situation. This generation is needing help from our pre/post retirement service. They need to know if they can afford to retire and what will they do with their time.

The third generation is dealing with home ownership, their children’s education costs and periods of being a single income household. We help this this generation with mortgage reduction and wealth creation programs.

The aged care part of our business is where we tend to see family issues arise. You have a generation that has not prepared their estate planning correctly, and who no longer have the capacity to do so. They need their well-meaning adult children to agree on the outcomes. This is where we see family issues arise. This is where the family tends to split into groups and where the advice process for the family can break down.

We find most clients are wanting information online, although retired clients still want to come into the office for meetings. The pre-retirement and the next generation have children and jobs, so they are generally time poor, but they are still wanting information and to know if they are on track with their financial planning. They seem more concerned about being on track than being in our office.

The younger generation in their 20s and 30s are seeing endless negative press on advice, products, lending and insurance. That’s where I see the issues being down the track. With increased regulation, the cost of advice will increase. This is where the family offering will help future clients being able to access advice sooner.

Those clients who are receiving advice and know they are on track, tend to refer their friends and family. Our job is to help them and help spread the word of the value of good advice.


Andrew Dunbar CFP®

Director, Apt Wealth Partners

Licensee: Apt Wealth Partners

Intergenerational planning has always been a vital part of what we offer at Apt Wealth Partners. Our approach is to understand our client’s holistic goals and needs, and create strategies to grow and protect their wealth. This includes ensuring their families and next generations are provided for if an unexpected event occurs.

Our intergenerational approach isn’t limited to wealth protection strategies for our clients and their families. We are focused on helping younger generations take control of their finances and start growing their wealth independently, too.

Young Australians simply aren’t saving as much money as their parents did. And while there are many factors that influence this – from today’s high cost of living to changing attitudes to money – we believe this is something we can change.

We have recently launched BeApt to help prepare young Australians for a lifetime of healthy finances. BeApt is a primarily digital financial planning tool for young people who are ready to live for today and plan for tomorrow.

The subscription service includes cash flow and property planning, superannuation and wealth protection advice, as well as advice and support to build a future-focused investment portfolio. Younger clients can set and monitor their own cash flow and savings goals via the app, as well as invest in areas they understand and believe in.


Peter Foley CFP®

Director, Thirdview Financial Planning

Licensee: Financial Services Partners

At Thirdview, we have a substantial client segment that we describe as aspirational. They are typically between 35 and 55 years old, are time poor and are seeking advice about how they can make the most out of their current position, but they either don’t know how to or just don’t have the time to implement strategies they know to be worthwhile.

Comments and questions from this group include: ‘Are we doing everything we could be to get ahead?’; ‘What are the things other people in our position are doing that work?’; and ‘We want to make sure the money we have is working as hard for us as it can be.’

This kind of language is clearly aspirational and so our focus is very much on helping our clients to design their ideal lifestyle and then coaching them to achieve it.

With aspirational lifestyle at the centre of our client focus, expectations are that we are able to clearly articulate key strategies that readily deliver value and clearly show improved outcomes. Clients want to see where they’re headed and how our advice brings them closer to achieving their ideal lifestyle and aspirational goals.

Because we ask our clients to articulate their own ‘why’, our advice coaching is not focused on helping clients understand the importance of advice, rather the focus is on the strategies themselves. That means clients are gaining a deeper understanding of their finances and feel more in control of their destiny. It also means that the value of advice is self-evident.

As a result, our clients feel more empowered to chase their aspirational goals and pursue their ideal lifestyle, which has also resulted in high client engagement.


James McFall CFP®

Managing Director, Yield Financial Planning

Licensee: Lifespan Financial Planning

In order to meet the needs of the ‘next generation’ of clients, it is important to understand what’s important to them and what appropriate opportunities exist, then to offer a service that is relevant.

Common themes we see that exist for people in their 20s and 30s include: developing a budget; buying a home; starting and supporting a young family; career progression; investing; and life insurance.

Generally, our younger clients engage with us more electronically, starting with how they find us. While our clients are typically professionals over 45 who are planning for retirement, we find we attract more forward-thinking young professionals through digital marketing efforts.

Their short-term goals, like buying a property, reducing debt or investing, are important to them, but they also have an eye on the long game. They want us to help them achieve a financial position where they don’t have to work, albeit they may choose to. The value we create centres on options and choice.

They are also more likely to be happy working together with us without actually meeting in person, using mediums like video conferencing as a time effective preference.

We recognise that our younger clients represent our future retiree clients and we actively look to build relationships with like-minded people, who we can assist as their needs evolve.


Cameron Felice CFP®

Wealth Partner Manager, Elston

Licensee: EP Financial Services

During the next 20 years, Australians aged over 60 will transfer $3.5 trillion to younger family members. At Elston, we see this as an excellent opportunity to engage the next generation of clients. However, it’s not without its challenges.

The financial planning industry is moving away from the traditional service-based offering, and becoming more experience-based.

Regardless of which business the next generation engages with, they want memorable experiences, and often draw comparisons between other services readily available to them.

They expect convenience and relevant information at their fingertips (mostly via their phones) and above all, authentic connections with people who can enrich their livelihood and purpose, providing a sense of empowerment.

To encourage engagement with the next generation, Elston places a strong focus on client experience. We offer tiered services ranging from a traditional, face-to-face model, through to a technology-based service, including an educational hub with the latest information, which is accessible anytime.

In addition to this, Elston has introduced a philanthropy service to help the next generation take on social responsibility and participate in values-based investing.

We also place great importance on family tree discussions with an educational focus, so we can fully understand the family dynamics.

By encouraging the next generation to attend meetings with their parents, and recommending that legacy planning conversations begin early, we develop a genuine connection with our clients, resulting in more meaningful outcomes for all.


Tony Sandercock CFP

Financial Adviser, wetalkmoney

Licensee: Boston Reed

Intergenerational planning is much more than getting ‘wills’ done or saving some tax. Many estate transfers fail within one generation, due to evaporated wealth and disrupted family harmony.

Two important pieces of the puzzle that are missing for many people are:

  1. Having important financial conversations between older family members and future heirs. Parents need to outline their expectations and why they have come to those decisions; and
  2. Heirs not being adequately prepared to manage the wealth.

We like to tackle both these issues head on. As part of our Estate and Generational Planning Review, we have an educational mandate to teach the trustees, beneficiaries and children of clients about their potential responsibilities, stewardship and the importance of managing their own affairs. That means they participate in that review.

If you are talking to the child for the first time after the parent’s death, you’ve missed the boat completely. Heirs typically fire their parents’ financial advisers after inheriting their wealth.

Our experience hasn’t been like that. Most are in their 50s (or older) when they inherit, and planning for life after full-time work is often their number one financial priority. With the options complex and the stakes high, they need (and will seek) advice. Given the existing relationship, we are a logical option.


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