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Keeping it in the family: two thirds of adults use same adviser as their parents

Financial advisers can help with a wide range of decisions, from savings and investments to financial protection, retirement planning and wealth transfer.

And when it comes to choosing a financial adviser, many people are happy to follow the recommendations made by family members.

In fact, as many as two thirds (67%) of people whose parents have an adviser share the same adviser as their parents, according to research by Prudential UK.

This highlights a huge potential for advisers to target different generations within the one family, Prudential says.

The company’s new Family Wealth Unlocked report looks at intergenerational planning and wealth transfer between advised families amid the financial volatility and insecurity of the Covid-19 pandemic.

The research, carried out by Opinium among 1,000 advised families in the UK, found that respondents favoured instructing advisers for their own needs, rather than shared family-wide goals. Perhaps because of this, 49% of those who have used the same adviser as their parents prefer to pay for the financial advice separately.

However, the study also uncovered a broadly positive approach to discussing finances openly within the family. Almost half (47%) admitted to ‘talking openly to each other about finances’ with only 7% revealing they ‘don’t trust their family members’.

An unexpected windfall (24%), receiving an inheritance (24%) and preparing for retirement (23%) are the scenarios most likely to prompt people to seek advice from a professional financial adviser. While integrating families’ financial situations will enable more holistic wealth transfer opportunities, advisers will need to balance these wider needs with individual generation-specific objectives, such as saving for a deposit, school fees or planning for retirement, Prudential noted.

Commenting on the findings, Vince Smith-Hughes, director of Specialist Business Support at Prudential UK, said: “Families are becoming increasingly aware of their legacy and wealth transfer. It appears the Covid-19 pandemic has been a contributing factor in bringing families together to talk more openly about their futures, consider their financial goals and begin planning accordingly.

“Our report also highlights how, especially for the younger generations, the need for financial support and guidance is most pronounced. It is hugely encouraging that many people are seeking the services of the same financial adviser as another family member at some stage during their life. And, with around 86% of those seeking advice actively doing so in the last five years, it seems the value of advice is increasingly being understood.

“But clearly there is still room for improvement as around a third of people don’t currently have a ‘family adviser’ and, with £5.5 trillion set to pass to the next generation over the coming years, this is an issue that advisers must help to tackle.”

Posted on March 15th 2021

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