Generational Wealth in Australia refers to the financial assets, property, and businesses transferred between generations of families. This wealth transfer is set to reshape the nation’s economic landscape, with an estimated $3.5 trillion transitioning from Baby Boomers to younger generations over the next two decades.¹

For many of your clients, wealth transfers aren’t just about finances - it’s a deeply personal and emotional decision. It’s about safeguarding their family’s future, preserving their legacy, and ensuring their hard-earned success continues for generations. This wealth can have various forms, including superannuation, real estate, other investments, family businesses, or legal structures such as investment bonds and trusts.

The implications of this intergenerational wealth transfer are profound, influencing financial planning, consumer behaviour, and the broader economy. That is why at Generation Life, we want to support and empower you towards proactively engaging your clients in intergenerational wealth planning today - securing your clients' financial futures that further strengthens your relationships with them.

Australians turn to financial advisers for estate planning

Generation Life’s Not Tomorrow’s Problem research shows that Australians are seeking help from financial advisers for estate and succession planning with over one in three are currently turning to financial advisers for guidance. This is closely aligned with lawyers or estate planning attorneys (35%) and ahead of accountants or tax advisers (20%).

This presents a significant opportunity for you to initiate discussions with your clients to help them structure their wealth transfer strategy effectively.

Imagine your business shrinking by two-thirds

The youngest Baby Boomer is now 58, and while males are expected to live until 84 years old and females 87 years old on average², the wealth transfer has already begun. According to research from CoreData, advisers lose on average two-thirds of funds under advice (FUA) as money moves between generations³. What needs to change to shift this number?

If this trend continues, it will significantly impact the future value of your business. What strategies and processes do you have in place to keep asset advice within your practice - not just for your clients, but for their families?

The value you’ve delivered for one generation isn’t necessarily what the next generation is looking for. Are your clients actively recommending you to their children? Does the next generation understand the value you bring? Now is the time to start strengthening those relationships before transfers happen.

When your clients reach the point of wealth transfer, it’s often too late to step in.

“If you haven’t been in the cart with them (before the transfer), they’re not letting you on board now (when they get the inheritance)” -Tim Henry⁴

Strategies for mastering estate planning

Estate planning is crucial to ensuring wealth is transferred efficiently while reducing the likelihood of tax implications and potential estate challenges such as disputes from unintended distributions, and inadequate structuring of assets. Without effective planning and having the right structures in place, your clients may not have their wealth transferred in the way they intended, impacting their loved ones and their legacy.

1. Facilitate early inheritances

There’s a growing trend of early inheritances, especially as property prices and the cost of living rises. Many parents prefer to see their loved ones benefit from their wealth during their lifetimes. You should explore whether your clients wish to pass on wealth before their passing and guide them with the best strategies to achieve this.

2. Understand tax implications

You need to ensure your clients understand the tax implications associated with different asset structures, such as superannuation, trusts, and investment bonds. For example, superannuation carries a death benefit tax for non-dependant beneficiaries; investment bonds offer tax-free wealth transfers, regardless of the recipient’s dependency status.

3. Structure assets effectively

Holding assets in appropriate structures, such as investment bonds or family trusts, can provide greater protection and efficiency when transferring wealth. You should consider alternatives to help your clients optimise their estate planning outcomes.

4. Involve children and beneficiaries

Encouraging your clients to involve their children and other beneficiaries in estate planning discussions can boost financial literacy and ensure smoother transitions. Proactively engaging multiple generations helps strengthen relationships, reduce disputes, and increase the retention of FUA for your advice practice.

5. Transfer with certainty

With 74% of estate claims in Australia being successful⁵, it’s critical to help your clients structure their wealth transfers with certainty. Investment bonds, for example, can be held outside the estate, bypassing probate and minimising legal challenges.

6. Stay informed and compliant

You should stay up to date on evolving estate laws and financial regulations to ensure your clients’ estate plans remain valid and effective, without unforeseen legal and tax complications.

7. Manage risks

Identifying risks such as family disputes, potential mismanagement of funds, or legislative changes that could impact wealth transfers, will help you recommend the right structures and prepare your clients accordingly.

Digging deeper to understand different generations

For effective estate planning, remember to identify the specific concerns of each generation and understand how significant milestones in one generations’ lives might impact others.

You can use the following questions as prompts to dig deeper and uncover some key questions relating to their finances that they might have, such as:

For late Boomers and Builders:

• When do we start to think about aged care, and how do I talk to my kids about it?
• How do I start passing on my wealth tax effectively and with certainty without impacting the next generation by a significant tax consequence?
• How do I manage conflicts, especially where we have complicated family structures and family dynamics at play?
• How can I bypass a generation if I wish to?
• I want to give the grandkids money to get a head start, but don’t want to have to wait until I pass away, but also don’t want them to blow it all when they’re too young. Can I maintain control once I’ve transferred my wealth?

For early Boomers / Gen X:

• I don’t think my kids will ever be able to buy a property and I don’t want them to have to wait until I die to help them out.
• Will I even want to stop work to retire? What if we both don't want to stop work?
• I’ve tried to chat to my parents about aged care options as they get older and they simply won’t discuss them.
• Do we want to stay where we are or move further out for a sea change or tree change?
• When do we look at moving if we aren’t sure whether the kids will stay with us or move out?

For Gen Y:

• Can we afford to send our kids to a private school? And should we accept our parents’ offer to pay the kid’s school fees?
• How do we talk to our parents about capturing their wishes in a will and who should manage that for them?
• If my parents aren’t sure about retiring, have they thought about volunteering as a way to stay active within the community?

For more insights and tools, you can access the full paper here.

By proactively guiding clients through estate planning, strengthening client engagement and implementing strategic wealth transfer solutions, you can position yourself as a vital partner in financial planning across generations.

Access ‘The New Age of Advice’ paper

The great wealth transfer presents a huge opportunity for financial advisers today. ‘The New Age of Advice’ paper, developed in partnership with Ensombl, includes practical and actionable insights from industry leaders, along with the approaches and tools they find useful so you too can prepare your advice practice for the intergenerational wealth transfer. You can access the full paper here.

Sources:

1. Australian Financial Review, Gen X prepares for the next great wealth transfer, https://www.afr.com/wealth/superannuation/gen-x-prepares-for-the-next-great-wealth-transfer-20230724-p5dqr0 on 7 August 2024, accessed 28 January 2025

2. 2021 Census of Population and Housing: Australian Life Tables 2020-2022, Australian Life Tables 2020-22

3. CoreData Research 2023

4. The New Age of Advice Guide, Ensombl 2025

5. Successful Family Provision Claims. UNSW Law Journal, Estate Contestation In Australia: An Empirical Study Of A Year Of Case Law, 2015

Disclaimer

Generation Life Limited AFSL 225408 ABN 68 092 843 902 (Generation Life) is the product issuer. The information is general in nature and does not consider the investment objectives, financial situation or needs of any person. Generation Life excludes, to the maximum extent permitted by law, any liability (including negligence) that might arise from this information or any reliance on it. Past performance is not an indication of future performance. The product's Product Disclosure Statement (PDS) and Target Market Determination are available at http://genlife.com.au and should be considered in deciding whether to acquire, hold or dispose of the product.  Other than in relation to Generation Life’s product, information provided is factual information only and is not intended to imply any recommendation or opinion about superannuation products or superannuation investment.