The global wealth transfer is set to change the make up of the financial advice sector and adviser are not ready for the rise of the female client.
According to Schroders’ financial adviser survey, around 80% of advisers believe that wealth transfer presents an opportunity to their business, however just 7% have a proposition for advising and retaining women.
The survey also identified a significant increase in financial advisers who are concerned about succession planning. Concerns about succession planning have risen significantly, putting this into third place, from seventh the previous year (3% 2020 vs 13% 2021).
The link between these points is important as 70% of women inheriting wealth change their adviser within a year of their partner’s death.
The resulting asset flows out of the business can therefore damage potential business valuations for advisers looking at potential exit strategies.
Understanding the reasons for change
Gillian Hepburn, head of intermediary solutions at Schroders, said:” During the last few years as the challenge of wealth transfer has come to the fore, the focus has been on transfer of wealth to the next generation.
“However, for the baby boomer generation who are passing on wealth now, the first point of transfer is typically from a husband to a wife. If significant numbers of these widows are not using the same adviser, then this could be a challenge for the industry.
“At Schroders, we were keen to understand the reasons why women tend to change adviser, and as such engaged Dr Eliza Filby, a historian of generations who has interviewed financial advisers, widows and women typically over 50 to understand their attitudes towards money, investment, inheritance and financial advice and how these differed from men.
”In addition to driving this discussion, we are also proud to be delivering not only investment solutions but also business solutions to help address many of these adviser challenges.”