Aussies remain underprepared in succession planning
This financial adviser is urging families to engage in more financial discussions around legacy planning and personal finance.
Brendan Bate, a financial adviser at HLB Mann Judd, has outlined why succession planning needs to be of greater discussion between families.
Australians’ financial planning horizon often finishes at retirement, with questions such as “When can I stop work?” And “Have I got enough super?”, Bate wrote.
“Another huge problem here in Australia is that there is a societal shroud of secrecy when it comes to personal finance. We don’t talk about it with each other – only about a third of parents apparently discuss it with their kids – and even if there are discussions, they are not backed by action,” he added.
Research from YouGov commissioned by Findex recently highlighted that advisers are critical to prompting and guiding these intergenerational conversations.
One in five of those surveyed said that receiving advice on how to involve family members in financial discussions, as well as having a trusted adviser to facilitate these conversations, would encourage them to engage in regular financial dialogues.
However, new research by Generation Life revealed that less than a quarter of Australians over 50 actually have a plan in place on how to leave behind an inheritance.
With Baby Boomers currently holding $4.9 trillion in assets and an estimated $224 billion to be passed on each year in inheritance by 2050, Bate pinpointed that up to 70 per cent of families could lose their wealth by the second generation. This could grow up to 90 per cent by the third generation.
“It’s fair to say the transfer of wealth has historically been done poorly and we still have a long way to go.
“Many older Australians are clearly underprepared and so are the children. The reality is that, in general, financial literacy is low through little fault of their own and I remain bewildered and concerned that Financial Planning 101 is not taught in school and first year university.”
The adviser encouraged dinner table conversations amongst families to discuss legacy planning, including philanthropic wishes.
Bate continued: “Don’t let the first hint of this be at the reading of a will.”
With intergenerational wealth discussions playing a crucial role in educating and preparing younger generations, he urged Australians to not leave it too late.
AUTHOR
Jasmine Siljic
Recommended for you
While crypto continues to gain traction among investors globally, improving accessibility for financial advisers is key to helping them serve the demand from younger clients, but there are some barriers still hindering adoption.
Investment platform Praemium has reported strong 2024–25 financial year results, with large increases across a range of business metrics, which it credits to the firm’s strategy and high-net-worth focus.
Alternative investment manager Regal Partners has set a target of doubling its offshore funds under management within three years amid strong inflows from offshore investors in the first half of 2025.
Fitzpatricks Advice Partners has formed a strategic alliance with two chapters of a global business support and networking organisation, expanding its offering for the firm’s advisers.
