BUSINESS
ANNA MURDOCK , HEAD OF WEALTH PLANNING
Bridging the Gap
IN MANY RESPECTS , INTERGENERATIONAL WEALTH CHALLENGES FOLLOW A TRIED AND TESTED PATH . AFTER ALL , EACH OF US IS AT THE MERCY OF THE SAME ECONOMIC ENVIRONMENT , THE SAME VAGARIES AND CHALLENGES OF THE TAX SYSTEM AND A SHARED OVERRIDING DESIRE TO SAFEGUARD OUR OWN FINANCIAL FUTURE . ANNA MURDOCK , HEAD OF WEALTH PLANNING AT JM FINN LOOKS AT NAVIGATING THE POSSIBLE SUCCESSION PLANNING CHOICES FACING US ALL .
Uncertainty caused by the pandemic has exacerbated people ’ s concern about their retirement plans . The shared view , regardless of age , seems to be that there will be a diminished standard of living in retirement . And with so many political and economic uncertainties , the importance of planning financially has never been so critical .
External factors aside , the challenges of passing on wealth to subsequent generations are not to be sniffed at . Many high-net-worth individuals experience conflict as a result of inherited wealth , with concerns about the future of their legacy in the hands of their children at the top of their list .
While shared pain-points prevail , what is true is that each generation is distinctly different and clearly characterised by the events of the world in which they were raised . From the Silent Generation and Baby Boomers , to Generations X , Y and Z , the enormous diversity in attitudes towards life and money in the face of very different life and financial challenges have far-reaching implications for investment decisions and wealth planning . How you manage your hard-earned cash , how optimistic you feel about your investments and your attitude to low interest rates , even how often you check your accounts , are all heavily influenced by your age and experience .
But this is not just about whether you have been around to take advantage of economic cycles or even how you vote . Investment habits stem from our different experiences and the fact that financial goals change as individuals move through the various stages of their lives .
There is a strong increase in “ generational ” wealth management , fuelled in part by rising property values and expectations of a changing tax regime and a desire to ensure that wealth is transferred and managed effectively . Most wealthy individuals want to make their money last not just for their own lives , but for generations to come . In my experience , family wealth fails to outlive the generation following the one that created it . This is partly because many people have unrealistic notions about what constitutes a sustainable spending strategy .
The simplest way to pass on assets is to gift them to children during your lifetime , using exemptions under inheritance tax rules . But how do you safeguard against the relatively high incidence of divorce and the potential for gifted assets to form part of a divorce settlement , not to mention spendthrift children ?
Ultimately good planning forms the bedrock of a successful wealth management strategy , taking into consideration the plethora of issues affecting people at different stages in their life .
To learn more about our investment and wealth planning services , please contact Paul Dyas or Marcus Holden-Craufurd on 020 7600 1660 .
The value of investments and the income from them can go down as well as up and investors may not get back the amount originally invested .
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