Attitudes around wealth transfers are changing as more clients engage their families in conversations around their finances and retirement, Edward Jones reports in a new survey out today.
According to research from the firm and Morning Consult, 89% of financial advisors out of the 200 surveyed say their clients have a wealth transfer prepared, with 65% adding that clients are bringing their children or parents to discuss their plans.
“It’s refreshing to see clients engaging their families in these conversations, as earlier involvement creates a better sense of trust and intentionality before the transfer takes place,” said David Chubak, head of the U.S. Business Unit and Branch Development at Edward Jones. “But most importantly, it gives family members comfort knowing they have a trusted financial advisor in their corner to help them navigate the financial, emotional and personal aspects that come in times of loss and change.”
Previous research has emphasized the importance of engaging loved ones in wealth transfers, yet studies have shown that families generally avoid discussing finances with one another. Another study by Edward Jones and NEXT360 Partners found that 35% of clients do not plan on discussing wealth transfers with their family, an alarming statistic as older generations are estimated to pass down $84.4 trillion in assets through 2045.
The latest study signals a change now as more clients want to continue growing their wealth while focusing on other life aspects, Edward Jones finds. When asked what their clients value most when receiving an inheritance, 21% of financial advisors said preparing for retirement is their clients’ top priority, followed by passing on wealth to children (18%) and maintaining their lifestyle (17%).
Financial advisors also acknowledge that conversations with clients on inheritance has changed in past years to focus more on increasing wealth. Thirty-five percent of professionals say their clients are more dedicated now on passing wealth on to their children, while 14% say clients are focused on passing it onto their grandchildren.
SEE ALSO:
- More Americans Avoid Wealth Transfer Conversations
- 401(k) Savings Incentives Seriously Amplify Wealth Gaps: MIT Paper
- Wealth Managers Expect Active Funds to Outperform in 2024
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
