Page 21 - Advice Matters - FWP May 24

Connecting an adviser with your children

How this wealth gets passed on could be the biggest financial investments: Younger generations want to invest in things
change in Australia’s history. It could also be the biggest they feel good about. They’re looking for advice to ensure
opportunity in advice that has ever existed. their investments align with their values.
Building trust across generations • Building a client value proposition: The value advisers
provide to you doesn’t necessarily matter to your children.
We know it’s critical for advisers to reach Australians at a Advisers need to demonstrate the value and utility of their
younger stage of life. But there’s a lot of groundwork that needs advice to your children.
to be done before an adviser can start advising your children.
• Focus on the tech stack: Millennials and zoomers are
Talking to other people’s children about money is a delicate technology-first generations. Advisers should meet them
matter. Wealth transfers and inheritance planning are not regular where they are when it comes to harnessing technology in
topics of conversation at the family level. Understandably, many their interactions and advice delivery.
families find subjects such as death and the future division of Technology is no substitute for real human connection, but in
wealth as unpleasant and potentially sensitive, especially when the right context it can help advisers engage on a deeper level,
multiple heirs are involved.
communicate the full value of their advice, and make certain
Building trust across generations helps facilitate open tasks quicker and easier.
discussions about the intended treatment of assets, as well as
the ‘who’, ‘how’ and ‘when’ of transferring wealth. This requires When it comes to ensuring investments are sufficiently
talking to both generations, not just the older one. diversified, staying informed about the markets, modelling
different scenarios, and monitoring investments, a significant
So, how should advisers ideally approach intergenerational proportion of clients prefer technology to be involved.
wealth transfers with you and your children?
For trust and confidence, feeling listened to, and knowing their
Advisers may have a strong, long-standing relationship with goals are understood, clients overwhelmingly prefer human
you, but that doesn’t mean they can automatically win trust delivery.
from your children.
Figure 3: Investors prefer emotional and financial
Here are some important considerations for advisers when planning services to be delivered by humans
engaging clients across the generational divide: Investor stated preferences (top 10 preferred for
• Younger clients describe themselves through their human delivery)
Source: August 2021 Census - Australians turning 55 by year, Australian Bureau of Statistics.

Figure 4: Investors have highest preference for digital services for portfolio outcomes and functional tasks

Notes: Quantitative research conducted by Vanguard in July 10 meant “Completely delivered by a digital service.” Clients
2021. In this figure, all 1,518 clients answered the question. They were considered to prefer human delivery if their rating was
were presented with the micro-interactions and asked to rate between 0 and 4 and digital delivery of the service if their rating
whether they preferred that service to be delivered by a human was between 6 and 10. Sources: Vanguard and Escalent, 2021.
or a digital adviser. The ratings were presented on an 11-point Source: https://www.vanguard.com.au/personal/learn/smart-
scale, where 0 meant “Completely delivered by a human” and investing/life-events/connecting-an-adviser-with-your-children

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