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Most HNW Americans Lack Adequate Succession Plans

February 6, 2017

Trillions of dollars of intergenerational wealth are at risk because the majority of high net worth individuals don’t have adequate plans to pass on their wealth to their heirs, according to a recent survey cited by CampdenFB.

Only 30% of Americans have a complete plan for passing on their assets to the next generation, according to a survey of 3,105 American, Canadian and British individuals with an average net worth of $4.5 million conducted this summer by RBC Wealth Management and cited by CampdenFB. And even though 54% of American respondents at least have a will, 30% haven’t done anything to prepare their estates for their heirs, according to the survey. Meanwhile, just 37% of American heirs were prepared to receive their parents’ wealth, the survey found. Among those who did have discussions about their inheritance, the preparations were minimal, as Americans don’t receive proper financial education until an average age of 28, RBC found.

Financial advisors may have an eager audience: 58% of the parents in the survey worldwide do believe a proper transfer strategy will ensure their wealth is passed on to their children, the survey found.

Bill Ringham, vice president and senior wealth strategist at RBC Wealth Management’s U.S. unit, tells CampdenFB that advisors have an opportunity to work with clients, lawyers and tax advisors to set up or update wealth transfer plans as well as discuss any misgivings about doing so.

Some clients, he tells the web publication, may be uncomfortable talking about their own death, so advisors should instead steer the conversation toward what their wealth could mean for their heirs.

And advisors whose clients do have wealth transfer plans in place should still ensure that they’re regularly updated, Ringham tells the publication.

By Alex Padalka
  • To read the CampdenFB article cited in this story, click here.