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FAs May Need to Help Educate the Next Generation of Wealthy Clients

By Alex Padalka June 18, 2018

Financial advisors may need to help provide financial education for their wealthy clients’ children. While the majority of high net worth investors value such education for themselves, few intend to pass on such lessons to their progeny, according to a recent report from the asset manager OppenheimerFunds.

While 84% of high net worth investors say they certainly derived use from financial education while they were growing up, such as learning about the benefits of saving, just 48% plan to give the same type of education to their children, according to a poll of 2,000 investors with at least $500,000 in net worth and advisors in the U.S. and U.K. across all generations.

Being able to provide valuable advice may be difficult, however, due to some substantial differences in how advisors and their clients view money management within the family. For example, OppenheimerFunds found that while 94% of advisors report arguments about money within families, only 64% of high net worth investors report the same. In addition, only 12% of investors believe that inheritance and estate planning are major issues for them, while 58% of advisors believe so, according to the survey. And while just 20% of investors say they have arguments over discretionary spending, 48% of advisors report observing it, OppenheimerFunds found.

Advisors also need to keep in mind the changing priorities from generation to generation. As reported, millennials are far more likely to be attracted to investments that incorporate environmental, social and governance standards than older generations, according to the survey. Younger millennials are also more likely to hold international investments than their older counterparts, OppenheimerFunds found.