Adviser and accountant expertise in the transfer of wealth during the retirement phase will be a key area that will propel business flows in the future.
Presenting at the NowInfinity International Conference in Hawaii last month, CoreData principal Andrew Inwood said the number of Australians entering pension phase in SMSFs was growing.
“That’s becoming the more interesting part of the business and means a couple of interesting things have to happen – one is that we need to get new clients who are in accumulation stage to preserve the longevity of the business; the second thing is that understanding how to transition wealth through run-off is going to be really important,” Inwood said.
“Transitioning wealth and run-off needs a whole set of new skills – transferring wealth to other people in the family, setting people up to move onto the next generation and being able to parcel that up and distribute it to other people is going to be really important as well.
“Having that conversation and [doing it] well is going to drive a lot of activity and the revenue of businesses in the near future.”
However, past CoreData research on trustees demonstrated those discussions around the transfer of wealth with their adviser were not common.
“When we tracked the trustees that we talk to about it, particularly the older ones, not a lot of those conversations are happening,” Inwood said.
“But it’s something that needs to be welded into the conversation now and start to be built in.
“I’m pretty sure everyone in this room has the skills, but yet the conversation is not happening and I don’t know whether it’s because it’s a difficult conversation or that it’s putting people in touch with their own mortality. But I can absolutely guarantee you that if you have a 65 to 75-year-old trustee … that’s a conversation that needs to be had and is something that’s on that person’s mind.”
