The second part of our inheritance economy report further examines the increasing importance in the UK of intergenerational wealth transfers and the opportunity available to the financial services industry.
Both parts of research were commissioned by Kings Court Trust and produced by The Centre of Economics and Business Research (Cebr).
You can still download the first part of our inheritance economy report to join the conversation
With an ageing population and rising levels of wealth, the UK is set to see substantial growth in the number of inheritances and financial gifts taking place each year. It is estimated that over £5.5 trillion will pass between the generations within the next thirty years. This amount of inheritance is unprecedented and raises both opportunities and threats for the financial services industry.
This is the second instalment of the inheritance economy research, which seeks to provide new insights into an area of growing importance to the UK economy – intergenerational wealth transfer.
The report uncovers evidence which shows the financial services community are not prepared to deal with the inheritance economy successfully. However, with the right approach, there is a fantastic opportunity for advisers.
As well as challenges, there are some substantial opportunities for financial advisers. Illiquid property wealth is set to be sold off on an enormous scale as individuals inherit estates over the coming years – increasing the stock of cash that could be invested and the number of individuals needing investment advice. This shift from property wealth to financial wealth could significantly increase the amount of funds under management by financial advisers but only if they seize and take advantage of the developments that are set to take place over the coming years.
*Macroeconomic forecast provided by Cebr
This ‘inheritance economy’ creates challenges for policymakers, families and the financial advisers who potentially stand to lose millions of pounds of assets as they cascade from one generation to another.
The challenge for the financial adviser community is how to continue to manage wealth on their client’s behalf as it is dispersed from one generation to another over time. This is not a given, and financial advisers could lose millions of pounds of assets under their management if heirs and gift recipients do not ultimately become clients.
Illiquid property wealth is set to be sold off on an enormous scale as individuals inherit estates over the coming years – increasing the stock of cash that could be invested and the number of individuals needing investment advice. This shift from property wealth to financial wealth could potentially significantly increase the amount of funds under management by financial advisers.
We are committed to work with financial advisory firms to provide a service which helps advisers to assist their clients and their relatives in the most effective way possible at a very difficult time, and help to build a high level of trust between the advisers and the beneficiaries. Ultimately, the aim is to encourage this relationship to be maintained for the long term.
If you would like to talk to Kings Court Trust about the inheritance economy, or how our market leading estate administration service could help support you and your clients, please contact us on:
Follow the conversation #inheritanceeconomy
Official Part 1 research paper
Official Part 2 research paper