As a legal professional or an accountant, it’s likely you’ll have clients whose financial goals include ensuring that their family members are provided for. Whether that’s now or in the future, creating financial security for loved ones is a priority for most people.

If so, a report by M&G Wealth is likely to be of interest. It explains that many people who share a financial planner with other family members are likely to be more tax-efficient and feel more relaxed about their wealth.

Read on to discover three reasons your clients might benefit from sharing a financial planner with other family members.

1. It could help provide peace of mind

Research by Klarna in 2022 showed that a third of UK adults are not comfortable talking about money with their peers. While 44% of those asked said they regularly worry about money, around a third (34%) felt too awkward to raise the subject with family and friends.

If you have clients like this, M&G Wealth’s report could provide food for thought. It revealed that one benefit for the 1 in 3 advised families that share the same financial planner is likely to be peace of mind.

This is because they know that loved ones were receiving expert financial help, which in turn means the whole family was more likely to achieve their financial goals, as well as financial security. The research also showed that every age group said they would all be comfortable sharing a financial planner.

Nearly one in four (37%) said they would feel more relaxed working with a planner that the rest of their family trusted.

It’s worth remembering that a common misconception about sharing a financial planner with other family members is that your client will have to share everything about their wealth, goals and strategies. More often than not, this is unlikely to be the case.

Usually working in tandem with family members is enough to allow your client to meet their financial objectives while at the same time helping their loved ones achieve theirs.

2. Your client could reduce their exposure to Inheritance Tax (IHT)

According to M&G Wealth, the amount passed on to younger generations through inheritance could reach £5.5 trillion by 2047. Little wonder it’s been called the “Great Wealth Transfer”.

While this may sound like good news for your client’s family, it’s worth remembering that Inheritance Tax (IHT) could significantly reduce any amount that is passed on to loved ones. This is because it’s typically charged at 40%.

Official statistics from the government show that HM Revenue & Customs received a record £6.1 billion in IHT in 2021/22, an increase of £729 million (14%) on 2020/21. When you consider Rishi Sunak’s decision to freeze the amount you are allowed to have in your estate before IHT is due, this figure could rise further.

That’s why it could pay for your client to work together with the rest of their family, to ensure they are maximising the tax breaks that are available to them. This could include gifting wealth or placing money into investments that are not typically liable to IHT.

As a result, any IHT liability your client’s estate has could be significantly reduced or even negated, allowing them to leave more money to friends and family.

3. Your client could ensure their whole family benefits

M&G’s report highlighted how different each generation’s concerns are. An example of this is that baby boomers tend to be more concerned by rising inflation, followed by their investments losing money.

This stands to reason as they’re likely to be retired or approaching retirement, meaning the rising cost of living and performance of their investments will directly affect their financial security. Younger generations tend to be more concerned about not being able to save enough money, struggling to get on the property ladder or not being able to build a large enough pension pot for retirement.

By sharing a financial planner, the concerns and goals of each generation can be taken into account, and woven into any financial plan that’s developed. It can help reduce the possibility of family squabbles and disagreements over money.

Another important issue raised in M&G’s report was the ability to support vulnerable family members, such as those who are elderly or disabled. Of those questioned, 34% said that this was a key reason for sharing a financial planner.

Get in touch

It’s likely that the future financial security of family members will be linked to your client’s financial aims. This is why sharing the same financial planner can be so valuable.

It means that the planner can consider the family’s common goals when they prepare your client’s financial strategy, and help each generation to achieve financial peace of mind. If you or your client would like to discuss these and other benefits of sharing a financial planner, please contact us on hello@ardentuk.com or call 01904 655 330.

As an award-winning financial advice company that was a 2022 VouchedFor Top Rated firm, you will have peace of mind that your clients will receive excellent advice and the highest quality service.

Please note

This article is for information only. Please do not act based on anything you might read in this article. The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.