Financial Planning Should Be Intergenerational – Kiplinger’s Personal Finance

What if financial planning wasn’t just a conversation between a client and an adviser? What if it could also be an enlightening discussion between parents, grandparents, kids and partners about their shared future?

Over the past few decades, the financial advice industry has been on the march away from transactional, product-centered meetings where an agent sits across the table to sell you an insurance plan or the latest investment fad. In its place, the industry has increasingly prioritized people’s planning needs over product considerations.

At Northwestern Mutual, we’ve been on the cutting edge of this movement – delivering clients comprehensive financial plans to help them protect what they’ve already built while also creating future prosperity.

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As this industry evolution continues, the question that I continue to ask myself is this: “What’s next?”

Staggering Wealth Transfer Coming

I believe one of the next-level terrains in financial services will be intergenerational wealth planning.

Over the next two decades, we will see the greatest wealth transfer in American history. It is predicted that Baby Boomers will shift a staggering $30 trillion in wealth, mostly to their family members.

But inherited wealth is not indefinite wealth. About 70% of affluent families lose their accumulated wealth by the second generation. Similarly, about 70% of family-run businesses fail or are sold by the second generation. Moreover, just 20% of today’s millionaires inherited their wealth; a full 80% earned it on their own. These statistics are leading many families to reassess the kind of estate they will leave behind to loved ones.

In my role as the head of Northwestern Mutual’s wealth management business, I’ve seen the passion that families have for setting up the next generation for success. It’s clear, however, that financial resources alone are not enough to ensure intergenerational financial security.

That’s why I believe intergenerational wealth planning can be a game-changer.

Often, younger generations have little insight into the inner workings of the older generation’s financial plans. This lack of awareness can create complexity and confusion, especially if a significant life event occurs. During an emotionally charged moment like an unexpected …….


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