Advisers missing out on £1.2trn millennials inheritance pot
More than half of advisers are not taking any steps to target potential clients aged below 45 as millennials are set to inherit some £1.2 trillion in the next 30 years, according to a report by financial group Sanlam UK.
Advisers surveyed say they are concerned about their ability to target this younger generation of clients and are aware of the perceived threat from robo-advisers and financial technology tools, the study found.
Almost half of advisers polled (45%) say potential younger clients are more likely to trust science or model-based advice rather than human advisers.
Robo-advice was seen as the biggest threat to the future of their firm by 40% of advisers surveyed.
More than 11 million people aged 25 to 45 expect to receive some sort of inheritance, with nearly half of those expecting to inherit at least £50,000 in fixed assets or money.
Of the 5.1 million expecting to receive £50,000 or more, the mean average value of the inheritance expected was £233,000, which would equate to £1.2trn.
Sanlam UK’s chief executive, Jonathan Polin, said the level of inheritance outlined is “unprecedented”.
“Clearly, the recipients of this wealth – many of whom straddle the line between millennials and generation Xers – are relying on their inheritance to act as a financial panacea,” he said. “This is understandable in the context of rising debt levels, stagnant wage growth, and spiralling property costs, all of which have had a deleterious effect on disposable income.”
He continued: “That said, over reliance on inheritance could be risky, especially if it affects the younger generation’s level of engagement with savings and investments today.”
However, 80% of advisers says the intergenerational transfer of wealth is the greatest opportunity for the advice sector and 61% say they have seen an increase in the number of clients asking about this over the past three years.
More than 90% of advisers say people under 45 are not getting adequate financial advice.
