By Vitality

With £5.5 trillion set to pass between generations over the next 30 years1, it’s clear this wealth transfer represents one of the greatest opportunities for the financial advice sector.

Yet, generational shifts in attitudes and ways of accessing financial services mean that engaging the next generation represents one of the greatest challenges too. The attitudes of the next generation are likely to challenge established approaches towards financial planning. Understanding the attitudes of this generation will be key to ensuring the longevity of your business model.

The opportunity

According to a recent study, nearly 11 million people aged 25 to 45 are expecting to receive an inheritance over the next 20 years. Almost half of these expect the inheritance to exceed £50,0002. The market for offering financial advice to these beneficiaries remains largely untapped.

More than two thirds of UK adults who expect to inherit £250,000 or more do not currently have a financial adviser2. Financial advisers have recognised the significance of this. More than four in five advisers recently ranked intergenerational transfer of wealth as the biggest opportunity for their business2.

The challenge

Yet, despite the opportunity, much more is to be done if we are to take advantage. Advisers have a relationship with only around 20% of their clients’ beneficiaries3. Even more concerning is that 90% of children fire their parents’ financial adviser after they receive an inheritance4.

Making contact with the beneficiaries is not the only challenge. Even where a beneficiary seeks financial advice, there may be challenges in creating and communicating financial plans. The attitudes of a generation brought up on the immediacy of Instagram, Snapchat and TikTok are in stark contrast with the longer-term nature of investment risk and financial planning. It is clear that engaging with the next generation will require a new approach.

The new approach

This new approach will require a more holistic view of financial planning and the value of financial advice in general.

For example, the next generation will expect more regular interaction, more scrutiny and more reassurance when market events affect their portfolios. Yet, at the same time, they’ll expect this to be delivered quickly, conveniently and in a communication style that appeals to them.

For this generation, personal values are key. For example, while all clients seek financial security, central to these clients will be achieving the good health to enjoy it too. Combining cash flow analysis with the impact of wellness (and hence longevity), will resonate strongly with a younger generation. Products that bring together health and wealth by providing short-term rewards and incentives for engagement appeals to their desire for more immediate and tangible goals.

What can be done to help

Key to meeting these needs will be harnessing the power of technology together with the insights of behavioural economics.

The industry has made great strides in modernising client investment portals with almost all providers now offering clients real time views of portfolio values and historic performance.

This technology can be adapted to the expectations of the next generation by simplifying views of key metrics and delivering information directly to clients through regular updates. Utilising the technology made available through investment providers can remove the burden from financial advisers, giving them more time to focus on what they do best – financial planning.

Research into customer behaviour provides insights and tools that can be used to keep clients focussed on long-term goals rather than short-term volatility. As a first step, advisers could explain the natural tendency towards short-term bias and how investment planning is set based on long-term goals.

Studies show that getting clients to provide their signature next to their long-term goals creates a stronger commitment towards meeting them. The regular communications that follow should be focussed more on the extent to which these goals are likely to be met than on current portfolio values. Investment providers can help too, by designing products that give incentives to customers who keep their money invested for longer.

Taken together, these simple but effective approaches could help unlock the opportunity that intergenerational transfers present. They allow existing advice processes to be maintained with only slight variations to appeal to the attitudes of the next generation. Failing to adopt these measures may mean that our industry will soon find attitude to risk replaced by the risk of attitude.

How VitalityInvest can help

At VitalityInvest we provide a way for advisers to reach out to the next generation. Our products are designed to appeal to the attitudes and behaviours of this generation. For example, we reward clients with real financial rewards when they make positive lifestyle choices. The use of incentives and subsequent rewards mean clients can see immediate value. In particular, when clients take steps to be healthy, we charge them less to invest, giving their money a better chance to grow.

With our high service levels and cutting-edge technology, we provide the next generation with a modern approach to investing and give you more time to focus on the things that matter to you.

We also offer three ready-made risk profiled solutions to cater for their varying needs. The funds are all risk-rated by Dynamic Planner and our VitalityInvest Risk Optimiser fund range, which forms part of these solutions, now has a three-year track record of delivering on investment outcomes for you and your clients.

For more information, get in touch with your dedicated Vitality Business Consultant or visit our website:


  1. Passing on the Pounds report, Kings Court Trust, 2017
  2. The Generation Game – Sanlam UK, July 2018
  3. The Great Wealth Transfer, Octopus Investments, 2019
  4. Schroders report, 2018

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VitalityInvest is a trading name of Vitality Corporate Services Limited. Vitality Corporate Services Limited is authorised and regulated by the Financial Conduct Authority.
This article’s view is based on the law, practices and conditions as at the day of publication. While we have made every effort to ensure they are accurate, we accept no responsibility for our interpretation or any future changes. | VI NL0016