This article is an edited extract from the Professional Planner ‘Guide on Financial Advice in 2026’, download the full copy of the guide here.
Produced in partnership with Generation Life.
Legacy is about both tangible and intangible wealth.
The intangibles include values, knowledge and memories. Tangibles include bequests and inheritances, encompassing property, business assets, shares and money.
For financial advisers, the majority of whom look after retirees and pre-retirees, many clients are thinking about their legacy, highlighting the need for expertise on succession planning, estate planning and the intergenerational transfers of wealth.
Financial advisers also have an incredible opportunity to provide advice on inheritance financial planning to help future generations manage, try to protect and grow their inheritances. They can educate and guide beneficiaries to be, not only recipients of wealth, but custodians of wealth.
With their soft skills, advisers are ideally positioned to broach the sensitive topic of mortality to get clients seriously thinking about their legacies and how they want to be remembered.
They can help clients uncover what’s truly important to them, articulate their goals and objectives, and navigate complex family dynamics.
With their technical skills and experience, they can help advise for the right assets to go to the right people, at the right time, in the right way, taking into consideration the impact of tax and the various structures available for building wealth including personal investments, investment bonds and discretionary family trusts.
Advisers can also liaise with other professionals, including accountants and lawyers, to review and execute wills and powers of attorney, and facilitate the smooth and efficient transfers of wealth between generations.
The four pillars
When it comes to estate planning and intergenerational wealth, legacy is just one of four key considerations. The three other critical pillars are longevity, lifestyle and liquidity.
In terms of longevity, Australians still maintain long life expectancies, due to improvements in health, nutrition and medicine, allowing many families to share meaningful intergenerational relationships.
They are increasingly paying for things like private school fees and intend to spread their estate across multiple generations. This has significant implications on the distribution of wealth.
Lifestyle is another critical consideration because people want assurances that they will be able to continue living comfortably right until the end and still have enough to leave an inheritance to their partner, children and others.
This is especially pertinent, as the current generation of retirees have higher lifestyle expectations and higher income requirements. Compared to their parents, baby boomers have a much greater appetite for travel, entertainment and hobbies, which bring us to liquidity.
Adequate liquidity is essential for funding lifestyle choices.
Five investment and tax structures
For building wealth and generating a regular income, there are five major investment and tax structures. The most obvious is superannuation, which remains the most tax-effective way to save for retirement.
There are also a number of alternative non-super vehicles. The most tax-effective, non-super structure has been heralded to be investment bonds.
With investment bonds, money can be accessed anytime and easily transferred, enhancing the ability of financial advisers and their clients to plan for the future.
For families looking to smoothly and efficiently transfer wealth between generations, investment bonds provide liquidity, flexibility and control.
Not only can they meet the needs of immediate benefactors, they may also be suitable for future beneficiaries of intergenerational wealth.
Superannuation, investment bonds and other non-super structures can all play a valuable role in effectively building wealth.
Felipe Araujo is chief executive officer of Generation Life.
