The head of a share trading platform has identified financial education as a key element to achieving optimal outcomes when parents are looking to transfer wealth to their children and grandchildren.
“The thing that we’re certainly seeing, I’m seeing with my own children and I saw with my own parents and my wife’s parents, is that real need to engage in financial education,” Selfwealth chief executive Craig Keary told attendees of the Australian Shareholders’ Association Investor Conference 2025 recently held in Sydney.
“So intergenerational wealth [transfer] starts with that financial education and literacy [piece], both for the parties who have got the wealth, but equally for the parties who are looking to inherit.”
Keary pointed out multigenerational planning is another activity that can facilitate successful intergenerational wealth transfer and that families are already collaborating with their children and their grandchildren to set financial goals for the future.
“What you’re going to do with the inheritance, that links back to your goal setting and links back to how you’ve educated [the relevant parties],” he explained.
He suggested a continual communication channel with the family’s most trusted financial adviser is also a critical component to the effective transfer of wealth.
On the other hand, he pointed out common traps that will work against families when passing wealth on to next of kin.
“There are a number of things that can go wrong [in this process], but I think the biggest that I would say [is not having] early conversations. If you have not engaged in early conversation, and as part of that conversation you’re recognising the parties who are going to inherit [and whether] they are set up for that success,” he said.
“That’s the biggest thing to be aware of.
“And then the second [pitfall] is lack of documentation. I highly recommend early conversations.”
''