Inheritors Plan to Seek Financial Advice When the Money Arrives: Survey

Financial professionals, take note: 79% of Americans in a new survey who are poised to receive an inheritance expect to work with an advisor after inheriting, and 54% will be much more likely to seek money-management advice once they have more of it, FreeWill, an online social-good enterprise, reported Tuesday.

Seven in 10 respondents said they prefer to work with a human advisor rather than an automated service.

“We hear a lot of fear from financial advisors that younger generations might move assets away from traditional advisors en masse as they inherit from their parents and grandparents,” FreeWill’s CEO, Jenny Xia Spradling, said in a statement.

“Our research shows that this may not be true, especially when advisors are proactive about preparing for the transition of wealth.”

Xia Spradling said advisors who have close relationships with both their clients and their future heirs should continue to thrive, particularly if they are knowledgeable about growing priorities such as estate planning and how to incorporate giving and purpose into the equation.

OnePoll conducted the survey from Oct. 28 to Nov. 1 among 1,000 U.S. adults ages 25 to 57 whose parents or grandparents have a financial advisor and who expect to receive an inheritance.

Factors Influencing Advisor Choice

Seventy-three percent of participants said they plan to hire a financial advisor as one of their first orders of business after inheriting. Sixty-six percent are likely to work with the same advisor as their elders — 69% said they have already met with their family’s advisor.

As to the priorities and factors that will guide their money-management decision making, 67% said they want to get the highest return on their portfolio, 64% want personalized attention, 45% want to avoid high fees and 43% will look for estate planning.

Respondents said family members’ favorable opinion of the family’s advisor and whether the advisor is knowledgeable about estate planning will be important factors in whether they retain that advisor.

Seventy-three percent said estate planning will become a bigger priority once they inherit. Already, 59% have started or completed their estate plans.

Most prospective inheritors said they will likely incorporate charitable giving into their estate plan, including 74% of millennials and 62% of Gen Xers.

Money Management Sentiments

Female and male respondents expressed different sentiments about managing their money.

At present, only 40% of women surveyed said they work with an advisor, compared with 55% of men who do so. Similarly, 60% of women in the study have met with their family’s advisor, while 79% of men have done so.

As far as investing their inheritance with an advisor, 54% female respondents said they will do so, compared with 65% of their male counterparts.

The survey found that about half of men but only a third of women said they prefer to work with a younger advisor. And avoiding high fees is a key value in an advisor relationship, according to 54% of female respondents versus 37% of male respondents.

Xia Spradling said these contrasts along gender lines suggest that advisors have a significant opportunity to invest in relationships with the daughters of current clients. “Household spending and investment decisions increasingly do not adhere to strict gender roles,” she said.