Intergenerational Financial Planning: Families Unite!

We often hear about the divisions of one kind or another, north and south, the haves and the have nots, us and them… In financial planning terms there lies an interesting divide too, albeit, in the case of families, the factions tend to be working together rather than against each other. I am talking about intergenerational planning.

Whilst some key factors remain common among different generations, the ways to arrive at their chosen objectives are not the same. Whether you are 30 or 65 you still have the need for solid financial planning, however your aims and priorities will at some point diverge. Your stage of life will have a profound effect on the type of advice you require.

Things such as level of wealth, family circumstances, inheritance considerations, career paths, investment experience, among many others, will impact on the eventual outcome. Your particular generation will face their own challenges, monetary, fiscal, legislative and crucially, attitudes will be different to those of the generations before or after you.

Meet Hugo, who is 38 and married, is firmly focused on career progression. He is making sure he maximises his pension contributions in a sustainable fashion, opening a Junior ISA for his newborn, and making the most of his own ISA allowances. In other words he is accumulating wealth and with the help of his Independent Financial Adviser he is on track with his plans for the long term. In practical terms this means that Hugo also has a mortgage, insurance, savings. The timescales and his stage of life mean that Hugo is likely to be less risk averse than his mother, as he has more time to weather any potential uncertainties.

Allison, Hugo's widowed mother, is 66, retired, and receiving a regular income from her pensions. She also has plenty of financial reserves behind her. Even though she is no longer actively building her wealth, she takes keen interest in her investment portfolio. However she is now understandably worried about the impact her eventual legacy may have on her children to whom she wants to pass her wealth. She is seeking suitable solutions to mitigate any such potential impact. She wants to make sure she has enough to enjoy a comfortable, happy retirement whilst also planning for the future of her children. Ideally, Allison wants to achieve both, and with the help of her Independent Financial Adviser she is on track.

Allison’s, grandson, Hugo the II, is off to University – his immediate priorities are keeping up with his expenses associated with studying in a new city as well as having some spare cash to enjoy himself. He is worried about the impact of student loans on his future. He needn’t have – as both Hugo and Allison together with the help of their Financial Adviser have made it possible for him to achieve all his own objectives.

As you can see, intergenerational financial planning offers so much more than simply passing on wealth – it is about not only not losing sight of the big picture but also focusing on the relevant details along the way. If you want to know how it all works, ask us how now!!

Silvia Johnson BSc(Hons) DipPFS EFA CertCII (MP) is a Director & Independent Financial Adviser at Royale Thames Wealth Ltd.

020 8720 7249 / 07908 109 741

Royale Thames Wealth Ltd is an Appointed Representative of New Leaf Distribution Ltd which is authorised and regulated by Financial Conduct Authority number 460421. The value of your investment may go up as well as down and the value is not guaranteed. Past performance is not a guarantee of future performance. Wills and Estate Planning are not regulated by the FCA.

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