Professional estate planners have ‘lots of opportunity, but also a lot of responsibility’ ahead of them as research shows that 65% of beneficiaries are set to inherit over £200,000 in the largest transfer of wealth from one generation to another, known as ‘The Great Wealth Transfer.’ At the same time, just 23% of estate planners reported having a direct relationship with beneficiaries.
It is also anticipated that greater use of digital services, processes and apps will smooth this transfer as Generation X and Millennials will expect it. Indeed the research showed that 52% of respondents said they did anticipate Gen X and Millennials would expect digital services, and were preparing for it; 40% agreed but were not preparing for it; and 15% of respondents said their clients were already demanding this.
The survey was conducted by technology provider Arken.legal and asked 252 organisations that operate in the estate planning industry questions about their plans for dealing with future clients. The Great Wealth Transfer is the name given to the passing of wealth from the baby boomer generation, born between 1946 and 1964, to Generation X and Millennial children. In the UK, this is expected to see £5.5 trillion of assets passed down between now and 2050. In the 202’s alone it is estimated £1 trillion wealth transfer will take place, and on a global basis, around $68 trillion is forecast to change hands.
When asked what the beneficiaries of the Wills they have created will inherit, 18% responded suggesting it was c. £50k-200k, 31% said it was £200k-400K and 34% said it was £400-£500k+. But the lack of access to, and understanding of, beneficiaries will hinder progress, say Arken.
When asked ‘“Do you feel your client’s beneficiaries are including their inheritance in their lifetime financial planning and are therefore starting to rely on it?” 48% of respondents felt they did. And 52% of respondents also felt that their clients were concerned about how their children or beneficiaries will manage the money they inherit. But the research showed that nearly one in four (37%) practitioners had no relationship with their client’s children.
Unsurprisingly firms are investing in digital in anticipation of this newer audience. 72% are investing in digitising more of their processes so their turnaround times are quicker. 68% are looking at how they can become more accessible for new clients via digital channels. And 54% are introducing more convenient channels for client communication.
The remainder, warn Arken, will ‘struggle to meet the service expectations and buying behaviours of Millennial’s and Generation X’ers. So not only will they not have a direct relationship with them, but they may also lose them to competitors who can better serve them.’
“Are Today’s Processes Fit For Tomorrow’s Clients?” is available to review in full here.
