Consumer duty has brought about the need to look at the finances of the whole family, rather than just individuals, according to Will Self, group CEO of Marwyn Acquisition Company II.
Self told FT Adviser: “I genuinely believe that with the bedding down of consumer duty, there is a role for a slightly differentiated financial services firm that looks at the needs of families more holistically.
“Rather than looking at individual products meeting the needs of a single customer, it is about looking more collectively at families together.
“So, how do families need support through their financial services experience? And that is remarkably not something that many companies look at.”
He said approaching clients this way can help in situations where it otherwise would not be possible or financially viable to serve someone.
He gave the example of “innovative” wealth management firms who have started doing family charging for investment advice.
“They won’t just deal with the parents that maybe have a portfolio of £200,000, they will also put together the children that may have £10,000 or £20,000 pounds each,” he said.
“Putting it all together and charging just on that one lump sum means it’s affordable for the smaller amounts of money.
“We’re trying to help and say, okay, let’s work with pensions, because pensions is a big chunk of assets with all of us. And let’s see whether we can start driving some consolidation, getting that thinking around families coming together, and really driving that.”
Relying on family
Self said families are more reliant on one another than they used to be with many parents and grandparents helping with deposits on homes.
He added pensions represent around 40 per cent of the wealth of the older population.
“Pensions have got this ability to take out 25 per cent tax free cash, and from a lot of the market testing we did, that tax free cash was being used for intergenerational wealth transfer purposes,” said Self.
“Pensioners were using their 25 per cent to fund first time buyer mortgages, to fund key life moments, to help with children’s big events, whether it’s paying for nursery fees, whether it’s paying for weddings, whether it’s helping them on the property ladder.
“But also, they’re starting to use it to pay the generation above to help with long term care.”
He said this “trapped wealth” in pensions plays a key role in supporting the needs of families.
Self joined Mac II from Curtis Banks, where he was CEO, back in March 2023.
In July, MAC II announced it had bought Carlisle based pensions services provider InvestAcc for £41.5mn.
The deal is still subject to regulatory approval, but when this is completed, MAC II is set to be renamed to InvestAcc.
Self said in the coming years, the firm aims to continue to consolidate in the Sipp marketplace to “create a really meaningful, customer centric Sipp operator”.
He said different ways of looking at intergenerational wealth can be helpful in the Sipp landscape too.
“One of the other big things with Sipps is, very morbid I know, but when somebody passes away that Sipp can get passed to the next generation, free from inheritance tax.”
“And so, if somebody has accumulated a very healthy pension scheme, and then doesn’t use it all, it can go to the next generation and in a very tax effective way.
“Again, you start thinking about a different form of the intergenerational wealth transfer and a different way of supporting family members in all of this.”
tara.o’connor@ft.com
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