Harness Inter-generational Wealth with the Help of Cash

There is no doubt that financial advisers have played a huge role in helping older generations grow their wealth to record numbers over the past few decades. Yet, we are approaching a time when this wealth will pass hands, in the largest predicted inter-generational wealth transfer the UK has ever seen.

Inter-generational wealth transfer has been cited as both the biggest challenge and biggest opportunity to face financial advisers over the coming years. In this article, we explore how a cash management service like Insignis Cash Solutions can help you to build an early relationship with beneficiaries in the younger generations and use cash to open the door to a new lease of clients inheriting a multitude of assets.

Wealth transfers between clients and their beneficiaries are already substantial and in 2017 totalled £69bn. Yet, the Kings Court Trust has estimated that £5.5 trillion will pass between generations within the next 30 years; an unprecedented amount inevitably creating a unique opportunity for the advisory business. Why such a vast amount and bigger than ever before? Not only are older generations living longer but they have increased their net worth by holding on to assets for longer and are therefore reaping the returns. With this in mind, continuing to plan for your current clients’ beneficiaries could be a significant source of new business.

The challenge facing advisers is to try and build an inter-generational relationship with clients and their beneficiaries before the wealth transfer happens. These conversations can understandably be difficult and there have been many solutions suggested as to how to start the conversation. We believe cash can be an extremely powerful door opener and will act as a “transmission mechanism” to bridge the needs of the next generation as they themselves evolve from spenders to investors. Cash is so powerful because it is a constant; a fundamental asset for all parties both before and after the wealth transfer.

For example, clients often hold a portion of their portfolio in cash for ease of access, but also may choose to set up a trust for their beneficiaries, also held in cash. As clients start to get older, it is often that they will put a Power of Attorney in place, with their children as the attorneys over the cash balances. When the wealth transfer happens, and beneficiaries gain access to these assets, it is almost certain cash will be held. Using a cash management product at an early stage can involve beneficiaries in the process upfront and therefore start the relationship building. Ensuring your clients’ cash deposits are looked after can be an effective mechanism to not only have your clients’ cash balances earning competitive returns but also to open the conversation with their beneficiaries.

Insignis sees families and their trusts as single clients and manage the respective portfolios holistically while applying a fee structure to the total funds under direction. This means all generations can benefit from the service on a coordinated basis.

The inter-generational wealth transfer happening over the next 30 years will be the biggest in history and creates an exciting opportunity for advisers. Cash will be paramount in harnessing funds that have been passed from clients to beneficiaries. By introducing your clients to cash products now you’ll give yourself a future reason to build the relationship with their beneficiaries.

Call us today to find out how we can help you with cash management on 01223 200 674 or email us at info@insigniscash.com.






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