Intergenerational wealth transfers: The vital role of Financial Advisers

Intergenerational wealth transfers are the passing of wealth from one generation to another. This is most seen in parents passing their wealth to their children upon their passing. So, what role does a Financial Adviser play in intergenerational wealth transfer planning?

Kings Court Trust’s 2017 research paper ‘Passing on the pounds: The rise of the UK’s inheritance economy’, revealed that £5.5 trillion is expected to pass between generations between 2017 and 2047. This represents an unprecedented amount of wealth transfers, which pose both opportunities and risks for the wealth management industry. 

The risks of intergenerational wealth transfers to Financial Advisers

As a Financial Adviser, you play a crucial role in helping clients manage their wealth during their lifetime and plan effectively to protect and pass it on after their death. This ensures you have sufficient funds under management to support your clients throughout their lifetime.

Upon your client’s passing, your funds under management are immediately at risk, as beneficiaries can inherit without considering financial advice or investment for their new inheritance. This risk increases if you have an ageing client base. With an older client base, the likelihood of clients passing is higher, and intergenerational wealth transfers really can’t be ignored, as you may be set to lose significant funds under their management.

Additionally, today’s wealth is disproportionately held by older generations, which could mean a higher value of funds at risk. Strategies are needed to:

• Speak to current clients about transferring their wealth
• Build early relationships with future beneficiaries
• Attract younger clients

The opportunity of intergenerational wealth transfers

Although intergenerational wealth transfers present a substantial risk to you as an Adviser, it also presents you with an opportunity to protect the future of your business by retaining and gaining funds under management through new clients.

This could include:

• Retaining funds under management from the beneficiaries inheriting your deceased client’s wealth.
• Gaining new funds under management from the beneficiaries inheriting other wealth from your client that wasn’t previously under your management.
• Attracting new funds under management from beneficiaries who may already have their own wealth outside your client’s estate.

To ensure you have the best chance of retaining and gaining funds under management:

• Discuss the transfer of wealth with clients during their lifetime.
• Find out if your clients are named as an Executor and likely to inherit from a loved one.
• Remain engaged throughout the estate administration process to provide beneficiaries with timely financial advice as they receive their inheritance.

Why should Financial Advisers stay involved during the estate administration process?

Firstly, by offering your clients or their families estate administration support following a bereavement, you can offer a unified client experience that covers lifetime planning and post-death administration. Partnering with a professional estate administration provider can create a great service to bring retention, continuity, and increased value to both you and your clients.

Secondly, you have the opportunity to build connections with the beneficiaries of the estate through your close involvement. You can help provide information about the deceased’s assets and previous advice given, which may impact how Inheritance Tax is approached.

If the client is happy for you to be involved, you can also be notified of the distributions to beneficiaries. This will allow you to offer financial advice at the appropriate time and present you with the opportunity to gain new clients. 

How Kings Court Trust can facilitate intergenerational wealth transfers

Advisers play a vital role in guiding families through the transfer of wealth between generations. At Kings Court Trust, we proudly work in partnership with Financial Advisers across the UK to provide their clients and clients’ families with the very best probate and estate administration services. Through our partnerships, we actively support Advisers in building meaningful connections with beneficiaries.

Case study: Retaining funds under management

Kings Court Trust’s Financial Adviser partner was notified by the Executor of a Will that one of their clients had recently passed away. The client’s total estate was valued at approximately £750,000, with £75,000 held under management by the Adviser. 25 beneficiaries were listed in the Will, presenting a huge risk to the Adviser to lose his funds under management now that his client had died.

The Adviser introduced the Executor to how Kings Court Trust could help, and after a home visit, the Executor instructed Kings Court Trust to complete the estate administration. As a result, the Financial Adviser successfully retained the original £75,000 under management, identified more than 20 beneficiaries as potential clients, and has opportunities to grow additional funds. The Executor was also happy that Kings Court Trust took away the burden of administering the estate and was pleased with the high-quality service they received. 

Next steps for Financial Advisers

If you don’t already have one, consider partnering with a probate and estate administration specialist to support your clients’ loved ones after their death and assist clients who are named Executors. Your clients may inherit and be in need of more financial advice. This is the easiest way to stay involved during the administration period and be notified of inheritance distributions (if the client provides permission). 

You may also find it beneficial to revisit strategies for attracting younger clients and discussing the transfer of wealth during client meetings. 

For over 20 years, Kings Court Trust has helped tens of thousands of families through probate and estate administration. With extensive experience in all types of estates, from straightforward to highly complex, we bring clarity, care, and confidence to every case. Our reputation is built on consistent delivery, excellent communication, and client satisfaction.

If you’re interested in finding out more about partnering with Kings Court Trust to facilitate intergenerational wealth transfers, get in touch with us by emailing partners@kctrust.co.uk or calling 0333 207 5470.