Over the next 25 years, a massive $120 trillion in wealth will be passed down to heirs, according to Cerulli Associates. Surprisingly, only 27% of these future beneficiaries, mainly children and widows, plan to continue working with their benefactor’s wealth advisor. This number drops to 20% for those who have already inherited wealth.
So, why are most heirs moving away from their benefactor’s advisors? A Cerulli survey revealed that half of the respondents already have their own advisors. For 28%, the lack of a relationship with the benefactor’s advisor was a deciding factor. Only 14% said they simply didn’t want to work with a financial advisor at all.
John McKenna, a research analyst at Cerulli, notes that this trend isn’t surprising. If parents pass away in their 70s or 80s, their heirs are often in their 40s or 50s by then. Many have built their own connections in wealth management and prefer to stick with what they know rather than start over.
Benefactors, on the other hand, seem indifferent about whether their heirs retain their advisors. Just over a quarter of them hope their inheritors keep the same advisor, while over half are either unsure or believe it’s up to their beneficiaries. A small fraction—7%—don’t want their heirs to continue with their advisor, often because the advisor doesn’t have a relationship with the heirs.
One key issue is communication. Many clients avoid discussing their estate plans with family. Among investors with over $5 million in assets, 20% said they prefer to keep their heirs in the dark about these details until after they pass away. Shockingly, 34% of high-net-worth heirs learned about their inheritances only after it was too late.
Scott Smith, a senior director at Cerulli, points out that benefactors often think they will talk to their heirs about financial matters but that these conversations rarely happen. This gap means advisors have fewer chances to connect with the heirs and explain how they can assist.
Advisors are encouraged to help clients initiate these crucial discussions. Smith emphasizes that it’s not just about retaining assets—it’s also about easing the transition for survivors when the time comes. By starting these conversations early, families can avoid panic and confusion later on.
In an age where digital financial tools are on the rise, personal connections still matter. A recent survey indicated that 68% of younger investors prefer face-to-face meetings with advisors, showing that the human touch remains valuable, even as technology evolves.
For more insights, you can check the full report by Cerulli Associates here.
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Estate planning,Financial planning,Inheritances,Suppress Zephr,Business,business news
