5 Things Advisors Should Know About the Great Wealth Transfer

Equitable released a new study on Tuesday aimed at helping financial professionals better understand the characteristics and goals of those who stand to benefit from the great wealth transfer that is underway in the U.S.

"Our research shows that large sums of wealth will change hands at historic levels, and the recipients are likely to look for a financial professional they can trust for support and guidance," Equitable's president, Nick Lane, said in a statement.

"Financial professionals who can get ahead of this curve by deepening relationships with the entire family will not only be in a better position to serve their clients, but also future-proof their practices as this transfer of wealth unfolds."

The Wall Street Journal's Intelligence unit conducted a survey on Equitable's behalf from June 18 to July 10 among 500 retail investors representing household finance decision-makers 35 to 64 years old with household incomes of more than $100,000 and net worth of more than $100,000, who anticipate receiving an inheritance or primary benefit of more than $100,000.

Here are five key insights to help advisors build stronger relationships with their future clients.

1. More than half of millennial respondents expect to inherit $1 million or more.

Most millennials will be advancing in their careers as their inheritance comes in. Although millennial respondents tend to be more self-directed than older investors, they also want help. In particular, 86% of millennial women said they trust the advice and decisions of financial professionals.

2. Pre-retiree women will also be substantial inheritors.

Much of the wealth women inherit will likely be in the form of a benefit following the death of a spouse. Thirty-four percent will inherit $1 million or more, including 10% who will inherit upward of $3 million. Nine in 10 women said they look for a financial professional who understands their life goals beyond their finances. They also want long-term support, with a third seeking an advisor who proactively builds strong relationships.

3. Eighty-one percent of inheritors intend to use a financial advisor.

However, only a third of respondents currently have a financial professional with whom they plan to work with after receiving a benefit or inheritance. This represents a big opportunity for advisors to tap into a sizable market that will likely seek to build relationships with a new financial professional to help them manage their money.

4. Trust is paramount.

For 55% of the sample, trust was the most important factor in choosing a financial advisor. Others focused on fees and the range of products and services offered by advisory firms.

5. Women and millennials are open to annuities.

Financial professionals help clients better understand a broad range of financial strategies, including annuities. Seven in 10 of female respondents said they would consider annuities if they were recommended or offered by their financial professional. Even more millennial respondents said they would invest in annuities if recommended by their financial professional or offered in a workplace retirement plan.

5 Things Advisors Should Know About the Great Wealth Transfer

1. More than half of millennial respondents expect to inherit $1 million or more.

2. Pre-retiree women will also be substantial inheritors.

3. Eighty-one percent of inheritors intend to use a financial advisor.

4. Trust is paramount.

5. Women and millennials are open to annuities.

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5 Things Advisors Should Know About the Great Wealth Transfer

1. More than half of millennial respondents expect to inherit $1 million or more.

2. Pre-retiree women will also be substantial inheritors.

3. Eighty-one percent of inheritors intend to use a financial advisor.

4. Trust is paramount.

5. Women and millennials are open to annuities.

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