High-net-worth (HNW) families are accelerating the transfer of wealth to their heirs, according to research from Capital Group.
The asset manager surveyed 600 HNW individuals across Europe, Asia Pacific and the US to explore their approach to inheritance and their own succession-planning.
The researchers found almost half (47%) of wealth holders have now inherited directly from their grandparents, with a majority (55%) having received between $1m and $25m.
They also found 65% of Gen X and Millennial inheritors in the research said they have regrets about how they used their inheritance money, with nearly two in five wishing they had invested more.
Three quarters of wealth holders surveyed reported “challenges in communicating succession planning”.
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Of those taking part, 61% said they rely on lawyers and 49% on accountants to handle succession matters, while only about 15% use financial advisers.
Financial advice is more prevalent in the UK the research found, with 36% of inheritors consulting financial advisers versus 25% globally. For succession planning advice the figures were 32% for the UK versus just 15% globally.
Across all age groups, 60% of wealth holders said they are unhappy about the way they used their inheritance, with one third regretting having underinvested.
In the UK however, 78% of those who sought advice reported feeling “better informed about managing their wealth” versus 52% globally.
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“Trillions of dollars are estimated to be transferred from Baby Boomers across the US, Europe, and developed Asia to younger generations in coming decades,” said Guy Henriques, president, Europe and Asia client group at Capital Group.
“Millennials and Generation Z are receiving larger inheritances at a younger age and could benefit from a financial adviser’s market insights and long-term investment perspective. Our study reveals that most wealth holders wish they had used their inheritance differently and invested more.
“We believe that by considering investing some of their newly acquired capital, HNW individuals could achieve long-term wealth generation.”
