3 positive reasons to share a financial adviser with your family

Financial decisions are not something you probably want to share. Not only are they extremely personal, but with today’s increasing number of sophisticated finance scams, it’s more important than ever to be extremely careful about who you share financial information with.

That said, one group of people you might want to include in your financial decisions could be your family. Doing so could help you to align your financial goals with your loved ones, which could provide peace of mind and help those closest to you to achieve their aspirations more quickly.

Perhaps this is why more families are doing it according an FTAdviser article. It revealed research that found 45% of Britons who use a financial adviser shared them with relatives in 2023 – an increase of 5% on 2022.

The research also found that one in three of the advised families that were questioned said they would feel ‘relieved’ if they used the same adviser as other family members.

While you might worry that sharing an adviser means that you’ll have to share your financial details with your nearest and dearest, in the majority of cases this won’t be necessary. So for November’s Talk Money Week, which aims to encourage people to be more open about money and finances with friends and family, discover three powerful reasons you might want to share an adviser with loved ones.

1. It identifies opportunities to help family members

As your adviser is working with your nearest and dearest, they’ll be able to identify opportunities for you to help loved ones – and vice versa. For example, if you’re older you might be wondering how to pass your wealth on to beneficiaries as smoothly and tax efficiently as possible.

Younger members of your family, on the other hand, might be much more concerned about not being able to save enough to buy their first property. Dealing with the same financial adviser means these two need areas can be identified, and a solution provided that helps to deal with both.

This might be for you to make a gift to the younger relatives earlier, as this could help them get onto the property ladder sooner and reduce any exposure to Inheritance Tax (IHT) that you may have.

2. You could reduce your and your relative’s exposure to tax

If you or other family members are exposed to IHT, it could significantly reduce the amount of wealth you can pass on to your beneficiaries. This is because the tax is usually charged at 40% against any portion of your estate that’s liable to it.

You will have your nil-rate band (NRB), which is the amount you can have in your estate before IHT is due, although this has been frozen until April 2028. This means that if your assets, property or investments increase in value, your estate could face a higher IHT charge while the nil-rate band remains static.

In 2023/24, the NRB is between £325,000 and £1 million depending on your circumstances. Having an adviser who understands your and your relatives’ estates means that they can create an IHT-mitigation plan that could reduce an IHT liability.

As a result, you and other relatives might be able to leave more of your wealth to beneficiaries. For more information on IHT-mitigation, please read our information guide.

It’s not only IHT though, as an adviser could also help to reduce your and your family’s liability to other taxes, such as Capital Gains Tax (CGT) or Dividend Tax. Because the adviser will have a holistic view of everyone’s’ financial situation, they’ll be able to ensure the relevant tax allowances are maximised and you and your loved ones are as tax efficient as possible.

One example of this could be to share certain assets with your spouse, which may allow you to double the CGT Allowance. In 2023/24, this would increase the total allowance from £6,000 to £12,000.

3. It could provide peace of mind about vulnerable family members

According to the above-mentioned FTAdviser article, one of the main reasons for the increase in families sharing an adviser is concern about the impacts of inflation for some loved ones. This could be particularly true if you have loved ones that are vulnerable, perhaps because they’re elderly or they’ve been diagnosed with a serious illness, or both.

Having the same professional look after their wealth means that you can relax in the knowledge that someone you trust is helping with the vulnerable relative’s finances. This provides peace of mind that any decision made is much more likely to be beneficial for the family member.

It also provides an opportunity for you to better understand the vulnerable person’s wishes and needs, meaning you’re better placed to offer them the support they need. If in the future you have to make decisions on their behalf, you’ll also have a greater understanding of their financial position and what they would want to happen. This means you’re more likely to act in line with their goals.

Get in touch

We understand that discussing your finances with relatives can be difficult, which is why working with a financial adviser could help. One way they could do this is to support you during challenging conversations with loved ones and help you to explain any circumstances you feel need addressing and the options that may be available.

Another way AFH can help you and other family members is with our trusts and estate planning services*, which could ensure your estate goes to the people you would want it to as tax efficiently as possible.

If you would like to discuss how we might be able to help you or your loved ones, please call us on 01527 577775 or speak to one of our advisers, as we’d be happy to help.


*AFH Trusts and Estate Planning is not regulated by the FCA.


Tuesday 14 November 2023