22nd November 2013

Aegon: Why advising the generations makes sense

If an advisory business has done its job properly for a client, then issues such as inheritance tax planning, life and critical illness protection and pension planning will have all been addressed in such a way that the client was happy and willing to have paid a fee for ongoing service and advice. But what happens when one of life’s eventualities occurs and the client dies? Where does any inheritance go? How aware are any beneficiaries of the advice and service that’s been provided?

Are the beneficiaries your clients and do you have any influence over where the inheritance you’ve helped create or protect will be invested in the future? More importantly, your client’s ongoing advice charge has died with them - how will your business replace that revenue stream? Are you a true generational adviser or do you just give advice to the first generation?

Conversations about multi-generational planning begin with the first generation. However, true generational advice is all about the creation of an estate plan.

The success of an estate plan can depend on two factors:

• a good understating of the clients’ aspirations and goals
• whether the details of the estate plan have been properly communicated to family members or intended beneficiaries 

The key questions to ask

• What are the goals and objectives for the estate?
• How will any plan serve the family or other beneficiaries?
• Does the current financial situation match the estate plan?

A key alliance when creating an estate plan and giving effective generational advice, is with the client’s solicitor. Both advisers and solicitors need to make the most of the opportunities available to them. That means looking at new ways to increase revenue and maximise profits.

As the primary purpose of generational advice is to tax-efficiently transfer family wealth, by openly discussing goals and objectives, you and your clients’ solicitor can strengthen relationships with your clients, their families and their beneficiaries. This gives you the opportunity to make sure the entire family are clients, and that you can continue to advise on the assets accumulated, with all generations benefiting from, and paying for, ongoing advice. 

Your role in generational advice

• Reviewing the current estate plan to make sure it matches the defined multi-generational planning goals and objectives.
• Working with your client’s solicitor to agree how your client’s goals and objectives should be incorporated into the estate plan.
• Establishing a relationship with your client’s children to act as a resource as they experience life events, such as purchasing a new home or motor vehicle, and planning for their children’s education.
• Preparing for, or facilitating, family meetings with their solicitor.
• Addressing goals that require charitable gift planning, such as gifting an overall percentage of the estate to charity or gifting a future lump sum.

You can charge for all of these activities, which allow you to establish an ongoing engagement with each generation, and other professionals such as solicitors.

If you’re in our profession for the long-term, I’d encourage you to consider generational advice to enhance your engagement with clients and to maximise your revenue potential. For help developing professional connections visit our business brain

John Joe McGinley
Head of Business Brain, Aegon 
September 2013

Business Development