One of the most incredible wealth transfers is set to take place in the next 20 years, with an estimated £1tn expected to be passed down to younger family members. In this article, based on our comprehensive cash report, we set out three ways to maximise the opportunities provided by this remarkable redistribution of cash.
1. Start conversations about the powerful potential of cash
Baby boomers – people born between 1946-64 – are one of the richest-ever generations, inheriting the wealth of the ‘silent generation’, and holding the most cash. As this demographic enjoys or approaches retirement, this sizeable liquidity is securing their own financial security and helping their children gain a foothold in the housing market.
Even before the cost-of-living crisis, many young people faced huge challenges getting on the property ladder as house prices soared. As a result, the ‘Bank of Mum and Dad’ is now one of the UK's major mortgage lenders.
However, the likelihood is that most of this cash is sitting in High Street bank accounts, earning a fraction of the interest income offered by a cash deposit platform. Simply starting conversations around how your clients can better grow and protect their cash is a valuable way to build trust from the get-go and start client-relationships off on the right foot.
2. Connect with younger investors and build a legacy
As well as getting on the housing ladder, homeownership represents security and opportunity. This inherited wealth also includes the transfer of responsibility as younger people explore the best options to preserve and build their own cash savings.
But if you think now’s not the time to connect with a younger audience, you may want to think again. Unlike their stereotypical image of ‘want it now’, 40% of millennials are already interested in planning for their retirement, and 40% are willing to pay for top-notch financial advice. The difference is younger people often distrust big financial corporations, preferring recommendations from their peers and shared good experiences.
The result is that IFAs are ideally placed to fill the gap. The key is understanding their lifestyle, what they want and expect from you, and building trust and credibility.
Of these expectations, tech is front and centre. Known for their technological savvy, and preference for online, intuitive transactions, younger people are increasingly likely to invest in secure and reliable platforms. A cash deposit platform could be a means to connect with an untapped younger audience looking for efficient ways to manage their savings.
3. Showcase the compelling benefits of a cash deposit platform
A more recent entry into the savings market, the cash deposit platform offers various advantages over conventional savings accounts. By introducing your clients to this modern way of saving, you can provide a solution that helps them make the most of their wealth.
With one password, your clients can access hundreds of savings accounts from several building societies, challenger banks, and investment-grade banks. This makes managing all their cash savings a simple feat.
They typically offer greater rates than those on the high street – including exclusive and market-leading rates, allowing savings to grow more quickly.
Given the vast sums of money involved in wealth transfers, protection is crucial – especially in light of recent volatility. By spreading their money across multiple accounts in the platform, your clients can maximise FSCS protection.
The bottom line is that this colossal redistribution of wealth gives advisers an opportunity never seen before. By appealing to investors of all ages, you can foster trust and lay the foundations for mutual opportunities that could last a lifetime.
To find out more about intergenerational wealth and what over 250 IFAs thought about everything cash, read our report – 'The cash conundrum'.
