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January 28, 2015 at 01:42 PM
The “Family Wealth Transfers Report,” an annual survey of the world’s ultra-high-net-worth individuals, is newly out from the people at Wealth-X. Sponsored by National Financial Partners, the report highlighted interesting trends concerning the aging of the UHNW population. These trends are important for estate planners to be aware of.
It should come as no surprise to advisors that affluent people tend to be older. The worldwide ultra-high-net-worth population, defined as those with assets of $30 million or more, averages 59 years of age. Billionaires are, on average 63 years old. (All these figures are global rather than U.S.-only.)
A full 25 percent of the HNW population is in their 60s. Another 13 percent of them are in their 70s. And 6 percent of them are in their 80s. That may seem like a gentle aging curve, but the distribution of wealth among those groups is far less gently distributed.
Through most of the age cohorts, the amount of wealth held by UHNW individuals stays fairly steady. Those in their 40s have an average net worth of $111 million. And those in their 50s actually have slightly less: an average of $109 million.
For those in their 60s, the number jumps to $146 million; and up to $195 million for those in their 70s. But for those over 80, the figure takes a quantum leap — to $305 million.
These findings have important implications for estate planning practices. The most fruitful clients, and the easiest ones to attract, tend to be the younger ones, who have half a lifetime ahead of them and may not have even thought about their estate planning needs. But it’s hard to ignore the fact that the elderly in this cohort have three times as much in assets as the younger generations.
Many advisors assume that the older affluent have taken care of their planning needs, but there are avenues into this area of business. A recent survey conducted by Cerulli Associates showed that 58 percent of all households with more than $5 million in assets are working with multiple financial advisors. Even if they have professional advice, they’re open to more.
