Three in five (60%) of millennials and generation z are expecting to receive an inheritance from their parents or other family members, with just under one in five (19%) expecting to receive over £600,000.

A new report by TIME Investments has revealed that one in five (20%) expect to receive an inheritance of between £400,000 and £600,000, with 17% expected to inherit up to £100,000.

The report, which specialises in tax-efficient investment services, reveals that although millennials and generation z earning over £50,000 per annum have a high propensity to seek financial advice, many with switch advisers following the inheritance of managed assets, putting assets under management (AuM) at risk.

The research surveyed 500 people all with annual incomes of £50,000 and above, with 250 of those generation z, aged between 18 to 26, and 250 millennials, aged between 27 and 42. To understand how advisers are serving these younger clients, research was also carried out with 125 UK professional financial and wealth advisers.

Although the percentage of those surveyed expecting to receive inheritance is high, the research found that just under half (47.5%) do not have a relationship with the advisers used by the family members they are expecting to receive an inheritance from.

Despite this, 46% of those who do not have a relationship said that would continue to use the same adviser when the wealth is transferred to them, compared to 28% who said that they would not use them. A further 26% said they don’t know who they will use, suggesting that they are open-minded either way, presenting an open-door opportunity for advisers to make them clients.

However, the proportion of inherited assets this age group is likely to leave with the same adviser is low. One in five (20%) said that they wouldn’t leave any assets with the adviser, with just 4% saying they would leave them all.

Business line director (tax) at TIME Investments, Tom Mullard, said: “Our report shows that generation Z and millennials earning over £50,000 per annum have an eye to the future and are actively engaged in saving and long-term financial and inheritance planning. They are financially savvy but also very much open to advice.

“Almost half (56%) are already using a financial adviser to help them on this journey, seeking guidance on different aspects of their finances. However, the findings also clearly show that at the point of intergenerational wealth transfer, there are gaps in interactions that the adviser community needs to address to prevent the potential loss of significant AUM. Here, engagement is key and finding new ways of making advice accessible, relevant and ensuring it adds value is crucial.”

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