“This applies for funds being gifted to younger people too, and exploring the different gifting options available with your clients can help them make the right decision based on how they wish for the money to be used,” she adds.
ESG-related views
According to Gillian Hepburn, commercial director at Benchmark, the latest Schroders global investor study demonstrates that there are differences in attitude towards ESG and sustainable investment across the generations.
She explains how 96 per cent of those aged 18-37 indicated that sustainable funds were attractive compared to only 82 per cent of those aged over 70.
“Similarly, when it comes to active ownership, 85 per cent of those aged 18-37 agreed that encouraging companies to adopt sustainable practices will help them to generate long term value compared with only 69 per cent of those aged over 70,” she adds.
Hepburn understands family conversations around wealth can be uncomfortable but she urges that best practice is to start early and “focus on the process and not the amount”, such as discussing wills, power of attorney, inheritance tax and the overall plan for passing on wealth.
In 2023, Charles Schwab surveyed generational attitudes to ESG investing. The survey found:
- Boomer investors are the least likely to take ESG factors into consideration when investing, with just 23 per cent favourable to ESG
- Gen X investors are more likely, at 32 per cent
- Millennials have warmed up to ESG, at 49 per cent
- Gen Z investors are ESG advocates at 50 per cent.
That said, Quilter's Rimmer says in her experience, views on ESG related matters have not caused any differences between family generations when it comes to gifting money.
Earlier the better
Daniel Chaplow, wealth planner from Succession Wealth says it shouldn’t be a taboo to talk about money and warns how foregoing or avoiding discussions around it can be damaging.
This is why he advocates tackling the talk around intergenerational attitudes to wealth before getting down to the act of recommending ways to pass wealth across the generations.
He says: “The earlier people start conversations around money with family, the easier it will be to broach the subject of passing down wealth when the time comes.
“You will often find that this openness can give rise to an understanding of what their children may wish to do with the money, which in turn may give the older generation more comfort that their money, should it be passed on, will not be squandered.
“Lots of younger people are struggling to save for houses, due to the inflationary pressures they have experienced, especially with wages not keeping pace with house prices and a little extra capital could go a long way to helping them out.”
