Money and financial decisions are often seen as a personal matter. However, making your family part of the financial planning process and discussing your goals with them can be valuable.
A report from M&G Wealth found that 33% of advised families share the same adviser, with around 57% of those sharing the same adviser as their parents.
If you’re used to keeping your finances separate, it can be difficult to begin sharing an adviser and discussing opportunities or concerns you have with others. However, sharing a financial planner doesn’t have to mean sharing every detail of your financial plan, and it can help you and your family get the most out of your assets.
Here are five reasons you should think about involving your family in your financial plan.
1. Your plans are likely to be intertwined
When you set out what’s important to you, it’s likely your family will be included in some way.
By using the same financial planner as your parents, children, or other family members, you can create a plan that reflects your priorities and the situation of others more accurately.
It’s also a step that can provide peace of mind. You will know that the people important to you are receiving expert financial advice that will help them reach their goals and achieve long-term financial security.
2. It provides an opportunity to understand the situation of others
The report found that 37% of people that share a financial adviser believe being aware of the financial situation of others is a benefit.
Intergenerational wealth planning can be complex, and there are likely to be many different concerns. However, using the same financial planner can help you understand what your family is worried about and the steps that can be taken to improve their financial security.
The report highlighted how concerns are likely to vary significantly between generations.
Among baby boomers, the biggest concern was rising inflation, followed by their investments losing money. As many baby boomers will have retired, investments can provide a valuable source of income and they may not have an opportunity to grow their portfolio with further contributions. As a result, managing investments is crucial.
In contrast, millennials were most concerned about not being able to save enough. The younger generation may be struggling to get on the property ladder and put enough away for retirement as they face cost of living challenges.
3. You could reduce your family’s tax burden
Having a combined financial plan that considers a variety of goals and concerns can mean you’re able to take advantage of more tax allowances.
In the M&G Wealth survey, 35% of families said saving on tax was a positive outcome of family financial planning.
Many different allowances may be suitable for your family, from the annual exemption, which allows you to pass on up to £3,000 in a tax year without worrying about Inheritance Tax, to the Dividend Allowance.
Which ones are right for you and your family will depend on your circumstances and priorities. A combined financial plan can help you make the most out of them.