The ‘kids’ inheriting older clients’ wealth might soon be retirees themselves

For as long as most advisers can remember, one assumption has underpinned almost every business growth plan: an older client’s wealth will eventually pass to their children, and those children will need an adviser of their own.

But that assumption may have a flaw, or at least a wrinkle, as revealed by Treasury’s 2026 Intergenerational Report, released on Monday. 

The “kids” who stand to inherit the older clients’ wealth are getting older too. Treasury’s report suggests that as clients get older, by the time their estate is actually settled their children are themselves likely to already in their late 50s or into their 60s, well established in their own careers and in fact closer to their own retirement than to buying a first home. 

They may be in less need of inherited wealth than their own children. So, if an advice business really wants to “freshen up” its client base by attracting younger clients just starting out on their financial journey, then maybe the onboarding efforts need to be directed at the next generation but one:   the grandchildren.

The Treasury report paints a clear picture of a population getting older and wealthier, and the challenges this poses both at a national level and to the financial advisers whose role is so critical to helping Australians manage both aging and getting richer.

It projects Australian women will live to 89.5 years and men to 86.1 by 2065-66, with the 85-and-over cohort set to triple in size over the same period. Deaths are projected to outnumber births for the first time by the 2060s, a milestone Treasury says many advanced economies, including Japan, Germany, Italy and the Republic of Korea, have already reached.

Population growth is expected to slow to 0.9 per cent a year over the next 40 years, down from 1.4 per cent over the past 40, driven mainly by a lower fertility rate. Treasury expects the economy to more than double in real terms by 2065-66.

Superannuation growth

Meanwhile, the report notes that superannuation assets have grown from $148 billion when the Superannuation Guarantee began in 1992 to $4.8 trillion today, and superannuation is now the second largest source of wealth for Australian households.

The median superannuation balance for Australians aged 65 to 69 is projected to rise from $204,000 in 2024 to approach a nominal $450,000 by the end of the medium term. Superannuation drawdowns are projected to rise to almost 6 per cent of GDP by 2065-66.

Treasury says this maturing superannuation system is reducing reliance on the Age Pension as the population ages, and that further reforms, including increases to the superannuation guarantee, paying superannuation on payday and boosting the Low Income Superannuation Tax Offset, will help take more pressure off the Age Pension in the decades ahead.

Treasury also points to a government reform package covering four fronts: making the superannuation system safer, widening access to financial advice, reforming the retirement phase of superannuation, and consulting on changes to strengthen the superannuation performance test. 

A system asking Australians to fund a longer retirement themselves with less reliance on the state needs more people getting professional advice. That need does not stop at the client sitting across the adviser’s desk; it extends to the child managing a parent’s affairs and the grandchild about to receive money they have never had to handle before.

The report also shows why aged care will increasingly become an advice staple: the number of Australians aged 65 and over will keep growing, with the fastest growth in the 85-and-over cohort, set to triple by 2065-66. 

Treasury says this will drive demand for care economy supports, and the Government’s response is to shift more aged care into the home setting and ask those who can afford it to contribute more towards their own care.

Advisers need to plan for all of this, gain the requisite skills and advertise their expertise before it becomes a crisis, not as an afterthought or add-on when a client is suddenly facing into these issues, or is helping a parent navigate them.

The key issue of housing

Treasury’s figures give a sense of why the children of older clients might not need the money as urgently as the older clients’ grandchildren, and one of the key reasons is housing.

“Young Australians have been locked out of the housing market as house prices have risen faster than incomes over decades,” the report says.

“If home ownership rates had remained at their 1981 levels, the most recent data available indicates around 250,000 more households aged 25–34 would own their own home.”

The government’s own response to these demographic and population-level challenges is a fascinating analogue to the direction advisers and advice businesses need to move.

An advice practice that wants a younger client base might have been flirting with potential clients one generation too old. 

A client in their 80s needs advice that can see them through superannuation drawdown and aged care planning. 

The child in their 50s or 60s, who is still working and not yet needing the money, needs to be kept in the loop, but not necessarily chased by the practice looking for a generational refresh of its client base.

The grandchild in their 20s or 30s, now locked out of home ownership and unfamiliar with managing money, might be the one who actually needs to be onboarded, and should be the focus of advisers.