Advisers key in Aussies’ legacy plans, research shows

According to a new report, titled, Rainbow’s End, produced by Fidelity International and independent research firm MYMAVINS, leaving a legacy for most Australians extends well beyond an inheritance.

Simon Glazier, head of wholesale sales at Fidelity International, explained that advisers play an important role as mediators in family wealth discussions.

“Most people intending to leave a legacy emphasise the importance of open discussions and documented planning with their family, but this can be easier said than done,” said Mr Glazier.

“This suggests a role for financial planners to help provide structure and mediation for these sometimes-difficult discussions on how wealth can be transferred, to whom and when.”

Open communication with family around inheritance was of great importance to all generations surveyed by Fidelity and MYMAVINS. Namely, while Baby Boomers led the way with 71 per cent finding it either very or extremely important, as many as 65 per cent of Gen Ys also prioritise it.

This extends to having financial advisers as mediators for estate planning discussions, with 37 per cent of respondents saying they would trust a financial adviser on these matters. Financial advisers also ranked in second place as the relevant party for estate planning, behind only a solicitor or family lawyer.

“I think it’s evident that advisers can play a larger role than what they currently are. Some do, some could obviously expand their service capabilities to include the increasing needs of both those wanting to leave a legacy on a number [of] fronts and those in the position to receive it,” Mr Glazier said.

“That’s where the opportunity lies. Some of the call outs there are to build the capability around being that mediator, managing the open communication lines between families. Just being in the conversation, understanding the complexities and being able to engage and educate on those complexities in line with the transfer of wealth.”

Helping loved ones achieve greater financial security is the top goal for leaving a legacy across generations, but the report found several other less tangible goals.

Aside from providing greater financial security, the top goals for leaving a legacy include expressing gratitude for family, supporting family goals, personal fulfilment, sense of purpose, and preserving family values and traditions.

“Legacy is more than just financial. There’s a high proportion of Australians that participated in the study that would prefer to pass on values and traditions. You look at the second highest, it’s to express gratitude and love for them, then supporting family goals, preserving family values and traditions,” Mr Glazier said.

He added that for many Aussies, their parents have passed down wealth and they expect to do the same, and for a large proportion, they plan to do this while they are still alive.

Specifically, almost 90 per cent said they are likely to transfer at least some living financial legacy before they pass away. This also raises the question of how much they can afford and the best way to structure their giving.

Based on the research, the majority of the financial legacy will still be transferred after they pass away, despite the bullish aspirations. Around two in three are likely to transfer 60 per cent or more of their financial legacy after they pass away, while only about one in seven are likely to transfer most of their wealth before they pass away.