Nearly half of clients who plan to pass along assets expect to give away some of their wealth while living, and among the very wealthy, an even greater percentage intend to do so, a survey of more than 400 financial advisors found.
On average, 46% of clients plan to share some of their wealth in their lifetimes, and 55% of those with over $25 million expect to do so, according to a study released Wednesday by Wealth.com and Ritholtz Wealth Management affiliate The Compound Media, which surveyed the advisors from Nov. 26 to Dec. 21.
The numbers suggest that "giving while living" is now a mainstream priority among wealthy families and no longer a niche philosophy, the firms said.
"Advisors are on the front lines of the $124 trillion great wealth transfer, and this research makes clear that legacy planning is no longer optional," Wealth.com co-founder and CEO Rafael Loureiro said. "Nearly half of clients planning to pass assets are already engaging in lifetime giving, and firms that proactively involve families report stronger growth and greater confidence in retaining the next generation."
The report, however, also noted a "legacy planning demand gap," with many advisors underestimating demand despite the "massive opportunity."
"Among those who don't offer legacy services, 61% said they would consider doing so with stronger client interest, while 37% of advisors evaluating the idea said they've hesitated because clients haven't asked for it. That creates a self-reinforcing feedback loop," the report says.
"Clients often assume estate-related help is outside their advisor's purview, while advisors wait for clients to raise the topic. As a result, both sides leave value on the table. Advisors who take the lead in raising legacy questions early can close that gap and unlock new dimensions of client engagement," it says, noting that "legacy planning is becoming a baseline expectation across wealth levels."
Callie Cox, Ritholtz chief market strategist, noted a "disconnect between client behavior and advisor initiation" and said advisors who formalize family engagement around lifetime giving decisions "seemingly enjoy stronger growth outcomes and greater confidence in retaining the next generation. But at the same time, many firms are still waiting for clients to raise the topic. The opportunity appears to lie in starting these conversations earlier and building a repeatable process around them."
The report says: "In our survey, advisors who arranged regular meetings with all account holders or household partners were more likely to report higher growth or success from legacy planning activities. They cited new assets and increased referrals as key outcomes."
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