March 2016 – Intergenerational Wealth Transfer

The March Mutual Fund Monitor – Advisor evaluates all content and materials that are available to financial professionals about generational wealth transfer. While this topic is an important professional concern, only 40% of the 20 coverage firms address the matter. Thirty-seven percent of these firms provide only a single item that mentions the topic. PDFs were the most common format for resources on generational wealth transfer, offered by 75% of the applicable firms in our report, followed by video content.

Firms try to encourage financial professionals to meet with inheritors to continue working with a client’s heirs. Select firms offer tips that advisors can incorporate into their practice, such as holding family events that include member participation across all ages and family meetings. The firms advise financial professionals to initiate talks before the primary client passes and to plan early. Sixty-two percent of firms suggest products that may be useful in getting heirs started with their investing journey, such as opening a ROTH IRA for a teenage inheritor.

Survey reports from both clients and advisors reveals that not all advisors are interested in pursuing heirs for business continuation. MFS’ Three-Step Guide to the Family suggests that 69% of survey respondents have not discussed family wealth transfer with their advisors. Corporate Insight’s 2015 report – The Changing Face of Financial Advice – identifies that only 28% of surveyed professionals have met their clients’ children.  When it comes to effectiveness in promoting generational wealth transfer materials, we considered the following parameters in our analysis:

  • Accessibility & Format
  • Type of Resource
  • Topic(s) Discussed

Of the 20 Mutual Fund Monitor-Advisors firms included in this report, we noted the following key findings:

  • Three firms offer the bulk of resources
  • Vanguard centralizes materials in a dedicated section
  • 15% of firms offer video
  • 30% of firms provide commentaries
  • 10% provide worksheets
  • All firms make resources retrievable via site search