Missed opportunity in HNW estate planning

Inheritance and estate planning remains the top unmet advice need for high net wealth (HNW) investors, according to Praemium.

Over 30% of HNWs said this was an area where they required additional support and one in five said this was an area they did not currently discuss with their adviser.

However, a third said they were averse to discussing this with their adviser as there was sensitivity around the topic.

This was despite some $30 trillion globally expected to pass from one generation to the next over the coming decade. For Australia’s HNWs, the figure was close to $2 trillion, around 70% of their total assets.

VIEW ALL

View all

Of those HNWs who expected to receive an inheritance in the future, less than a quarter said they expected to use an adviser to manage with the majority expecting to do it themselves.

The specific areas of intergenerational planning where HNW investors said they were most in need of knowledge and technical support were tax optimisation and wealth preservation, cited by 40% and 24% of respondents respectively.

Praemium also highlighted talks on this subject could help firms work with more members of a client’s family, who may later pay for advice themselves, and help improve the financial literacy and ongoing education of beneficiaries.

“Those advice firms that have already built a multi-family offering have a distinct advantage over their peers. Developing an advice proposition that includes inheritance and estate advice and education will help to mitigate the risk of losing clients in the future, and capture the opportunity that the rapidly growing intergenerational transfer of wealth presents.”