More clients making wealth transfer plans a family affair

Edward Jones research gives an advisor-eye view of shifting trends in wealth transfer conversations and clients’ planning priorities.

The dynamics of generational wealth transfer are evolving as financial advisors take part in a trend toward more inclusive discussions involving family members, according to research from Edward Jones.

In a survey it conducted recently with Morning Consult, nine-tenths (89 percent) of advisors reported their clients have established plans for wealth transfer. Encouragingly, around two-thirds (65 percent) of the advisors in the poll say clients are including their children or parents in discussions, indicating a shift toward multigenerational planning.

“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,” David Chubak, head of the US business unit and branch development at Edward Jones, said in a statement.

The research also revealed discussions on generational wealth have become a regular part of client meetings, with almost four-fifths (77 percent) of advisors engaging in those conversations at least quarterly.

Almost unanimously, the advisors in the survey provided valuable guidance around how families would pass their wealth on. Ninety-eight percent said they assist clients in setting specific parameters, including fund allocation (68 percent), having the advisor oversee the transfer (65 percent), and obligations related to the care of a loved one or an asset (54 percent).

Echoing some of its recent insights around generational wealth discussions, Edward Jones’s study also showed shifts in the focus of wealth transfer conversations over the past five years.

Thirty-six percent of advisors reported a recent trend toward accumulating wealth to be used during the client’s lifetime rather than as part of a legacy. An almost equal number (35 percent) see an increased emphasis on transferring wealth to children, while 14 percent of advisors see their clients focusing more on giving to their grandchildren.

Retirement readiness remains a key concern for those inheriting wealth. Among financial advisors working with that segment, 21 percent said preparing for retirement was their clients’ top concern, closely followed by a desire to pass wealth on to their own children (18 percent) and a preference to maintain their own lifestyle (17 percent).