A new research report highlights a changing outlook on financial advice, stressing that it encompasses more than just money. It also anticipates a surge in fresh prospects for financial advisers.

The report, commissioned by Fidelity International and conducted by research firm MYMAVINS, found that 62 per cent of Gen Y individuals, 59 per cent of Gen X members, and 54 per cent of Baby Boomers strongly feel they have a nest egg mentality.

“If a large proportion of the population have this mentality, and this desire to pass on a legacy, understanding the complexities of that is really important to a large number of people,” Fidelity’s head of wholesale sales Simon Glazier said at the report’s launch on Tuesday.

Recent research from Generation Life revealed that more than 80 per cent of high-net-worth individuals intend to leave a legacy, but only one in five have a plan to do so. Finextra Wealth financial adviser Heath Hebenton told Professional Planner last week that it is incumbent on advisers to ensure clients are prepared and can meet their estate planning and charitable goals.

There is a growing awareness that advice is about more than just money, according to Glazier.

Advisers are suitably positioned to address the unfulfilled needs of individuals interested in creating a financial legacy, the report – titled ‘Rainbow’s End’ – says.

It states that the majority of Australians who want to leave a financial legacy are “looking  to do so with warm hands, preferring to give while they are still alive rather than after they are dead”.

Additionally, 35 per cent of those who inherit wealth have unfulfilled needs of their own and would seek advice on how to use it wisely.

An imminent transfer of wealth

An AUSIEX report released in July suggested financial advisers should brace for the imminent transfer of wealth as the first Baby Boomers approach their statistical age of death (81.3 years for males and 85.4 years for females, according to Australian Bureau of Statistics).

Glazier said that advisers can take on a more significant role than they currently do.

“Some could obviously expand their service capabilities [to meet] the increasing needs of those wanting to leave a legacy on a number of fronts and those in the position to receive it. That’s where the opportunity lies.”

He explained there are several key messages in the report for advisers to build a capability around being a family mediator and managing open communication lines between families.

“What has historically been in the realms of the extremely wealthy is now called out as a need for more and more Australians,” he said.

“So again, if you’re an adviser, it’s worthwhile looking at expanding that service capability.”

The role of the adviser is changing, according to MYMAVINS consulting partner Jason Andriessen.

“It [now involves] working with the solicitors [who] can write watertight instruments, legal instruments,” he said at the report’s launch.

“There’s a need to be proactive and have the conversation with your clients and help them have the conversation with their families.”

The research for the report was conducted in September 2023 and involved an online survey of 1500 Australian consumers over 26. To ensure a diverse representation, the survey used a random sample categorised based on factors such as generation, life stage, advised status, and whether respondents planned to leave a financial legacy before or after their passing.

The respondents were categorised as Generation Y or Millennials (aged 27 to 42, n = 455), Generation X (aged 43 to 59, n = 485), and Baby Boomers and the Silent Generation (aged 60 and older, n = 560). The sample included 371 retirees, 538 respondents with an active relationship with a financial planner, and 1,044 individuals who intended to provide a financial legacy to their family or loved ones.

 

 

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