More than two thirds of advisers have admitted they have no plan in place for what is expected to be the largest wealth transfer taking place over the next 30 years.
Research from Octopus Investments found just 31 per cent of advisers do have a plan for this inheritance wave, estimated to be worth £5.5tn over 30 years by the Kings Court Trust.
Almost half of advisers are also concerned about losing assets under management in the event of a client death, with those surveyed estimating they have lost between £300,000 to more than £5mn after clients have passed away.
Jess Franks, head of investment products at Octopus Investments, said: “We are on the cusp of a seismic shift as the Great Wealth Transfer occurs in the next couple of decades.
“There is also a clear generational divide, both in how advisers are engaging with clients’ beneficiaries, and in perceptions of the value of advice amongst younger generations.”
As well as speaking to 200 advisers, the survey spoke to 1,000 UK adults with investments partly or fully managed by advisers.
Just 48 per cent of the investors said their adviser had engaged with the beneficiary of their estate.
However, 58 per cent of investors think their beneficiaries would stay with their current adviser and 79 per cent would recommend them to their loved ones.
Despite this, advisers think the next generation is less interested in their finances and 46 per cent said this generation does not see the value financial advisers provide.
Franks added: “It might seem like an obvious point, but you don’t want the first time you meet your client’s beneficiaries to be when your client has passed away.
“Depending on the age of the client, you’ll want to start building the relationship with their beneficiaries now. Help them understand the planning you are putting in place.
“Prepare them for the wealth that will come to them. The more engaged they are now, the more likely they will seek your advice when they inherit.”
Advisers believe the main reason for not retaining assets is that beneficiaries want to spend their inheritance, but 79 per cent of investors said they would be likely to invest the money, highlighting a disconnect between advisers and potential new clients.
“Getting intergenerational planning right is key to protecting the value of your business,” said Franks.
“Estate planning is a natural opportunity to deliver great outcomes for clients and unlock the chance to work with the next generation.”
tara.o’connor@ft.com
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