Advisers are at risk of losing business by failing to put in place an intergenerational business strategy, warns HSBC Life.
A national study by the insurance giant found 96% of advisers believe intergenerational planning is important for their business, with 56% describing it as ‘highly important.’ Despite this, only 62% have a clear intergenerational business strategy in place, while 30% say they are working on one.
HSBC Life said many firms lack engagement with their clients’ children, with less than a third (30%) of advisers saying they had discussed financial plans with client’s children, although 35% have met their clients’ offspring.
Advisers showed greater success at engaging their clients’ partners. Nearly three fifths (58%) of advisers have met their clients’ partners and 54% have discussed financial planning with the partner.
According to the report, the rise of direct-to-consumer platforms as well as “natural scepticism” among younger generations poses a threat to advisers’ ability to retain the business of clients’ beneficiaries. HSBC Life said advisers should focus on developing their engagement skills, with a particular focus on digital communication, advice and guidance.
Mark Lambert, head of onshore bond distribution at HSBC Life, said: “Advisers may have worked their whole career to build up their client bank and their clients’ wealth but if they don’t put into place strategies to build a trusting relationship with inheritors there is a very real risk that this wealth will go elsewhere.
“While many advisers do have a relationship with a client’s spouse it can be less common for them to also know their children. This makes it even more important to encourage financial conversations with clients, spouses, and beneficiaries. Encouraging ongoing conversations is the key to retaining future clients.”
