Strategies for engaging clients and their families in the wealth transfer journey

This article first appeared in Ensombl on 31 January 2024

Australia is experiencing the biggest generational wealth transfer ever, with estimates that Australians aged 60 or over will be transferring an average of $175 billion per year in wealth for the next decade at least.

This massive movement of wealth will obviously bring with it some unique challenges and opportunities for the people transferring the wealth, those they are transferring it to, and ultimately the financial advisers assisting both parties.

A recent study undertaken for Fidelity International by independent research firm MYMAVINS found that almost four in five Australians aged 26 years or older believed sharing their wealth with the next generation was important. But it also found that as many as one in two are only somewhat or not confident at all about how they can make this happen.

The research involved an online survey of 1,500 Australian consumers over 26, with fieldwork undertaken in September 2023.


People looking to transfer their wealth to the next generation cite enabling a smooth transfer of assets to beneficiaries, and a lack of knowledge and understanding of relevant estate planning laws and regulation, as the two most common issues they face, according to the Fidelity International research.

They also mention not understanding the most tax-efficient way to transfer wealth, lack of awareness about the importance and benefits of estate planning, as well as difficulties in navigating complex family dynamics.

While the financial complexities may be well known, it is also important to understand the role that multifaceted family dynamics can play in wealth transfer. People leaving bequests need to be confident that their wishes will be followed and that they will not create further inter familial conflict. Similarly, those receiving bequests hope that it won’t cause family rifts or exacerbate existing sibling or offspring rivalry.

Many Australians also don’t want to wait until they are dead to pass on their wealth and would prefer to leave a financial legacy with ‘warm hands’. This is obviously very helpful for children looking to get into the property market, for example, but it has its own set of challenges and can complicate retirement planning for those passing on the wealth.

The Fidelity International survey found that two in five people prefer to share their wealth as a living legacy compared to the one in five who prefer to just share their wealth as a bequest. The remaining two in five have an equal preference, meaning that four in five want to leave some kind of living financial legacy.

The role of the adviser

Families need a trusted professional that can guide them through these complex times. Somebody who understands all their financial issues but who can also be empathetic to complex family arrangements.

Those in the Fidelity International Survey who said they would seek out professional help were most likely to trust a solicitor or family lawyer on estate planning matters at 49 per cent, followed by a professional financial planner at 37 per cent.

Families may also look for a ‘mediator’ who may be able to encourage and facilitate open discussions within the family. When such mediation is required, survey participants cited solicitors or family lawyers as the most likely professional they would seek help from, at 48 per cent, followed by a professional financial planner at 24 per cent.

Many said they hoped a third-party professional mediator could help with issues such as uncomfortable discussions, assisting with estranged family members, ensuring fairness of distribution of assets, knowing how best to care for a disabled family member and helping with keeping records and legally binding documents.

Engaging the next generation

The younger generations who are receiving the wealth in the great wealth transfer have slightly different preferences to their parents and are more likely to seek out the professional help of a financial planner, according to the research.

Like their parents, the younger generations prefer the face-to-face services of a financial adviser, but it needs to be in the context of a multi-channel service experience.

The most popular source of advice for people receiving significant financial help or inheritance from family is a professional financial adviser, at 35 per cent, followed by self-reliance at 21 per cent, family at 21 per cent, own research at 16 per cent and super fund at 10 per cent.

Gen Y, or millennials, are the generation that will be receiving the most wealth and are more likely to take a collaborative approach with their financial advisers. They have also grown up with more technology than their parents and are happy to complement or verify any advice with their own research.

The Fidelity International research found that around three in five Gen Ys want to be serviced by email, three in 10 want text message communications and one in five want video calls. These are all higher engagement levels with these mediums than their Boomer parents who are more likely to do it themselves with only the occasional assistance from an adviser.

Therefore, financial advisers wishing to engage Gen Y need to be able to provide them an omni-channel experience and meet them where they are, whether that be in-person meetings, online access to financial plans and advice, or a combination of both.

Financial planners who can provide these kinds of services will be best placed to engage the next generations and grow their businesses as a result.

Read the full report