Advisers encouraged to engage with clients' kidsBY ELIZA BAVIN | MONDAY, 29 JUL 2024 12:25PMNew research from AMP has revealed Australians' attitudes to intergenerational wealth. The research found half of those under 40 believe they will need to support their parents financially as they age, with children and their parents reluctant to discuss intergenerational wealth matters. An estimated $3.5 trillion is set to be transferred by Australians aged 60+ in the next two decades, with 90% of all intergenerational wealth transfers are occurring through death inheritance. "This latest research reveals an interesting dynamic within families, including a lack of communication between the generations on wealth matters," AMP director of retirement Ben Hillier said. "It's also evident that while many Australians under 40 are concerned about housing unaffordability and its impact on their long-term wealth and retirement, they are reluctant to ask for financial support from their parents, with many actually believing they will need to financially support their parents as they age." Hillier said the findings create a good opportunity for financial advisers to engage with their clients and families more closely on matters of retirement and the transfer of wealth. "We have a significant opportunity in Australia to help more retirees build their financial confidence, empowering them to fully enjoy their post-working years. This can be achieved through better access to lifetime income solutions and financial advice, improved financial literacy at all ages, and a simplified retirement system," he said. "Most importantly this confidence could improve their quality of life in retirement, but it could also be a catalyst to open the lines of communication with their children on important wealth matters, such as inheritance and estate planning. It may even empower them to support their children financially, which we know from AMP's previous research they're keen to do. "Importantly, the sharing of knowledge and insights could help build greater collective financial literacy and confidence within the family unit." The research also revealed that only one in five Australians under 40 are relying on financial assistance and inheritance from their parents for their own financial security. In addition, four in five who don't own a property believe it is out of reach for them, and the same amount believe not owning a home will be detrimental to their long-term wealth in retirement. AMP bank group executive Sean O'Malley said fears around homeownership is a justifiable concern for younger Australians. "Building the financial confidence of retirees and finding better ways to unlock home equity would also empower more older Australians to support their kids," O'Malley said. "While this needs to be tackled at a macro level by federal and state governments, there are other, more immediate options for younger Australians wishing to purchase their first property." Related News |
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