If we think about the differences in the wants and needs that can exist between the generations and the demand for appropriate financial planning solutions, it can become something of an eye opener. Each generation requires advice that is particular to their aims, ambitions and financial objectives and it is important to ensure every client, no matter what generation they belong to, will receive the best advice and solutions for their individual circumstances.

As a Consultant at Lowes, I have more than 20 years' experience serving a family throughout the generations. Here is an example which I experienced of when members of the same family have needed differing sets of advice pertinent to their age.

The couple in their 50s 

John* and Diane*, were in their late 50s and had accumulated a reasonably large investment portfolio between them. They felt somewhat overwhelmed by the responsibility of trying to manage their investment portfolio by themselves and came to Lowes for advice on a suitable investment strategy as they approached their retirement. Unfortunately, Diane died unexpectedly. We helped the family set up a discretionary trust that enabled John and other members of the family to benefit from her wealth while minimising the tax liability. Seeing how well Lowes handled his mother’s affairs, their son Steven* also became a client, after wanting advice on his pensions and investments.

We have since helped John plan in terms of inheritance tax and in addition, he has looked to us to help invest some money on behalf of his first grandchild in appropriate vehicles, with a long-term outlook as he knows that will benefit her the most.

John, our original client, initially came to us when he wanted investment planning advice, looking to grow his investment with a view to creating wealth for retirement. Now we are advising him on protecting his estate, inheritance tax, lifetime gifting, reducing risk in his investment portfolio, and consolidating his assets to make them easier to manage. Steven and his wife, on the other hand, are firmly into accumulating their wealth and are looking for strategies that will help them do that.

Differing needs

In general terms, more mature clients will tend to look for inheritance tax planning, income from investments, a means to supplement their pension income in retirement, greater levels of security and lower risk, and often will want to consolidate and rationalise their investments, in order to make them more manageable. In contrast, younger generations can be more open to taking greater risk with their investments, as they have a longer time frame in mind, for example when planning for retirement; they are looking for capital accumulation, financial security to prepare for the uncertainty that the future can at times bring and also to create wealth for their own retirement.

Sometimes individuals will either defer or overlook issues like inheritance tax planning simply because it might not yet affect them. The people we see who are most keen on inheritance tax planning are the sons and daughters of someone who has died recently, who have had to write a large cheque to the taxman, when some simple planning could have saved them much of that pain. It tends to be a learning process for the children in that situation and we find they come to us then because they don’t want their children to have to go through the same situation.

Financial planning can feel theoretical when you are doing it. It’s only when something happens and the reality of the situation hits home, that the full benefit can be seen. There can be a demonstrable impact on clients’ lives. It’s why we do what we do and it reinforces the value for people of taking good quality Independent Financial Advice.