There has been a steep rise in the past year in the amount of assets and platform accounts that are being linked between family members on Quilter’s UK platform, Old Mutual Wealth.
In the second quarter of 2020, just 0.5 per cent of flows into the Quilter platform went into accounts that are linked between different family members. By the first quarter of 2021 that had grown to 12.7 per cent of all Quilter platform flows, or GBP1 in every GBP8 placed on the platform.
In the past year, approximately 73,000 accounts have been linked on the platform allowing customers to benefit from a multiple family member discount, which significantly saves money across the generations.
Launched in February 2020, Old Mutual Wealth’s family linking allows as many family members across four generations to be linked on the platform. There is no minimum investment and each family member’s charge is based on the total value of all products held on the platform by the family members who are linked.
Karen Blatchford, distribution director at Quilter, says: “There is an estimated GBP5.5 trillion expected to transfer through the generations in the next 30 years and worryingly 66 per cent of children fire their parents’ financial adviser after they inherit their parents’ wealth. To combat this, the creation of a family office is becoming increasingly popular as financial advisers intensify their focus on intergenerational wealth transfer planning.
“Platforms can work well in this situation by combining the assets held across family members to lower the charges paid by each individual client.
“While spousal linking on platforms is common in the UK, family linking is rarer. We are really pleased to see advisers beginning to make use of family linking and for clients to receive the benefits. The transfer of wealth in the UK means there is a great opportunity for advisers to start to thinking about the future clients, as well as the ones in the here and now, and we feel family linking is a great conversation starter for this.”
Andy Watt, director of Watt Money Ltd, says: “Family linking changed the conversations I have with my clients. Families started collaborating and with so much choice in the market it helped to focus my clients’ minds on a strategy that was cost effective.”