Make Sure You Discuss Wealth Transfer With Your Adviser

Make Sure You Discuss Wealth Transfer With Your Adviser

If your financial adviser has never broached the subject of passing on your assets to the next generation, you have lots of company.

A J.D. Power 2015 U.S. Full Service Investor Satisfaction Study finds that only 42 percent of investors say their advisers have asked them what will happen to their money when they die. The report finds that 71 percent of investors tell their advisers who they have named as beneficiaries, and are willing to discuss passing their assets on to them.

Missed wealth transfer opportunities

Discussing the passing of wealth to the next generation gives investors a golden opportunity to retain control of clients’ assets after the clients die. So why would investors shy away from talking about it? The director of the wealth management practice at J.D. Power, Mike Foy, cites three potential reasons:

  1. Wealth transfer can be an awkward topic to discuss, since it means acknowledging clients’ mortality.
  2. Advisers might be facing retirement themselves and may not be planning to work with a new generation of clients.
  3. While each firm’s interest is to retain clients, individual advisers may not see wealth transfer as the best use of their time.

Win-win for advisers and clients

Including provisions to transfer assets to the next generation is a crucial component of financial planning, since it gives clients peace of mind that their descendants will be provided for in the future.

Advisers can also reap benefits. The survey finds that of the investors who have named their beneficiaries, about a third of the beneficiaries already have an account or product with their benefactor’s advisory firm.

That number increases by 24 percent when advisers ask their clients about the financial needs of their beneficiaries.

Furthermore, the next-generation beneficiaries may need help regarding their inheritances.

Accenture — a management consulting, technology and outsourcing services company — projects that between 2031 and 2045, 10 percent of total wealth in the United States will be changing hands every five years. Also, an estimated $30 trillion in financial and nonfinancial assets will be exchanged in North America from the boomer generation.

The team of investment fraud lawyers at Starr Austen & Miller LLP fights for the protection of investors and handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence and breach of trust.

Source: Investment News