Industry Voice: 4 ways to demonstrate the value of a gifting strategy to a family

The intergenerational wealth transfer opportunity is there for advisers that are willing to engage with both existing clients and their wider families.

clock • 4 min read
Industry Voice: 4 ways to demonstrate the value of a gifting strategy to a family

Whilst baby boomers have accumulated a large portion of the wealth that exists today, many of their younger family members are facing financial pressures due to rising housing and education costs - not to mention the financial damage caused by the pandemic.

Here we explore 4 key steps that advisers can take to create a regular gifting strategy for their clients:

Ask about the financial pressures of younger family members

 It could be the increasing burden of education costs. Or the difficulty of saving enough for a deposit to buy a property. It could even be a shortfall in an older relative's retirement provision.

Whatever the circumstances, do your best to identify the pain points being experienced by a client's family - and how their excess wealth may help have a positive impact.

Demonstrate that regular gifting is a super solution

A gifting strategy can have positive benefits for all involved.

So, make sure the client is aware of their excess wealth, and their ongoing ability to gift a modest sum of money to their nearest and dearest. Also ensure you illustrate the long-term benefits of regularly investing (not just one-off gifts) - for example the tax benefits of regular contributions to a pension or ISA.

 

Click here for Quilter's guide ‘Growing your money into £40,000' which can help you explain to your clients the impact making regular gifts early can have on the education and property purchase plans of their children and grandchildren.

 

Click here for Quilter's guide ‘Illustrations of regular gifting into a pension' which can help you explain the impact their gifts can have on the retirement plans of their family.

 

Create trust in your regular gifting recommendation

At this point it is about involving as much of the family in the process as possible.

Energise the ambitions and address the vulnerabilities of individuals in what is likely to be a diverse group of people with different goals and needs.

For example, you could offer control of the gifting via the use of trusts - or highlight the age limits that control access to products such as junior ISAs or pensions.

 

Did you know...?

Current gifting behaviour appears to be unplanned with surprise one-off gifts.

  • 43% of Millennials have received a gift but only 20% expect to receive one. The most common gift they receive is a lump sum between £1,000 and £10,000. 1 in 4 of Generation X and Millennials have received a one-off gift of wealth from a family member in excess of £10,000.

Nearly half of Baby Boomers can afford to make gifts out of their wealth and with another 1 in 4 needing help to understand if they can or not.

Wealth transfer consumer research commissioned by Quilter via YouGov in July 2020*

 

Prove the value for money you deliver to the family

 Here you can focus on your advice rather than simply the product - for example, comparing the differences between their unadvised situation today and your recommendations.

Demonstrate an overall family financial plan rather than a series of unconnected actions. Provide them with key things like tax efficiency, the best value solution and simply being there for them when difficult decisions need to be made.

Looking to find new ways to demonstrate the value of a gifting strategy to a client and their family? Click here to find out more about Quilter's family linking - a multi-family member discount.

 

The Quilter solution  

Quilter is the new name for Old Mutual Wealth.

Since 1979, we've been supporting financial advice professionals like you.

This year we have invested significantly into our platform upgrade, to help you build more valuable relationships - moving forward together. A key part of the improvements has been to make it easier for advisers to incorporate true intergenerational planning with a full range of age specific ISAs and other products and better value for clients with family linking of accounts.

 

Click here to find out more about our new platform and ongoing commitment to advisers just like you.

 

View Quilter's legals here 

The value of your client's investments may fall as well as rise and they may not get back what they put in.

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