Despite the market maelstrom that has slashed the value of portfolios left and right, there is still plenty of wealth that is on the brink of being transferred from one generation to another.
According to a recent Cerulli Associates Report, Wealth Transfer: Sizing, Trends, and Opportunities, $38.2 trillion will be passed from the so-called Silent Generation and first-wave baby boomers to heirs and charity between 2011 and 2035. Bequests to heirs are by far the most common, representing 87% of the wealth to be transferred during this time, according to the report. This sizable asset base presents a substantial opportunity for advisors. "The demographic trends that drove the financial industry to develop and distribute retirement income solutions will also lead to the necessity for products and services that address wealth transfer," notes Lisa Plotnick, associate director and co-author of this report.
The report counsels that as a natural extension of the retirement income process, manufacturers and advisors need to consider the products their clients will most likely be holding during retirement, and the implications those products present for effective wealth transfer. "In a perfect world, planning for both retirement income and wealth transfer would be done in tandem," says Plotnick.
