Over half (57%) of high net worth Brits do not feel comfortable talking about money with them, according to research from Charles Stanley.
The firm surveyed over 200 HNW individuals with over £500,000 ($614,415, €565,118) investible assets.
When delving into who they are comfortable talking about money with, their partner comes out on top at 72%, followed by a list of professionals such as IFAs (66%), investment managers (56%) and accountants (53%).
But children (43%), grandchildren (17%) and parents (21%) come much further down in the pecking order.
The top reasons for a reticence in talking about money were to do with privacy.
Some 31% like to keep things private and 23% said that they hesitate because they think they might tell other people. Around 18% felt strongly that conversations about money may upset people, while 17% think that it is not appropriate to discuss money.
The research also found that a third (33%) of HNW investors agree that people do not talk enough about money.
HNW dependents
Conversations about money across families are important because 69% of HNW investors are financially supporting someone.
This is mainly their children (42%) or a spouse/partner (38%), but it also includes grandchildren (15%), siblings (11%), parents (10%), and even friends (10%).
A further 5% are supporting in laws, while 5% are supporting other family members.
Looking into what HNW individuals are generally helping their children with, education (38%) and luxuries (38%) came out top, followed by supporting them in buying a property (29%) and the cost of living (27%).
HNWs are also helping children with life events such as divorce (6%) and IVF (4%).
Passing down wealth
Despite the taboo around talking money, the majority (94%) of those surveyed are planning to pass down their wealth to the next generation.
Some 76% intend to do this using a will on death. A far smaller proportion of respondents are looking at ways in which they can reduce their inheritance tax liability by thinking about ways to pass down wealth in their lifetime.
Around four-in-10 (39%) plan to gift to their loved ones in advance, while a quarter (25%) are looking at trust arrangements.
Only 5% plan to use the tax benefits put in place by the government to encourage investing in small-to-mid-sized UK businesses by investing in Aim shares or portfolios.
Of those who are passing down their wealth to the next generations, 22% are yet to have a conversation about it with their loved ones and 14% said that they never intend to.
Difficult conversations
Andrew Meigh, managing director of financial planning at Charles Stanley, said: “Planning across the generations is a huge focus for clients. Many HNW individuals have a number of dependents, not just their spouse and children, but across generations and new modern family make-ups.
“Wealth management is not just about numbers, it’s about helping families have difficult conversations so that there is transparency, and the best outcome can be reached across the whole family. Loved ones are the most important part of our lives and so it’s important that relationships are maintained and managed when talking money. A good investment manager will support you in having these conversations.
“What was also interesting to see is that when it comes to passing down wealth, not all the tools in the toolkit are being used, which could have implications for the amount you are able to pass down.”
