Heirs Likely to Retain Family's Financial Advisor If Relationship is Established Early

News provided by

May 04, 2023, 10:00 ET

New Research from Nuveen Reveals "Great Wealth Transfer"
Offers Significant Opportunity for Forward-Thinking Advisors

NEW YORK, May 4, 2023 /PRNewswire/ -- Contrary to industry narrative, individuals who inherit wealth are often eager to continue working with a family financial advisor whom they already know and trust – an opportunity that can well position an advisor to participate in a major intergenerational wealth transfer.

That is a key finding of the inaugural Nuveen Wealth Inheritor Research Study into the attitudes and behaviors of "wealth inheritors" released today by Nuveen, the investment manager of TIAA.

The new research offers several key lessons for advisors in advance of the massive asset flows likely to occur in coming years, with older Americans projected to leave tens of trillions of dollars in accumulated wealth to their heirs -- the greatest wealth transfer in history.

"Within the advisor community, there has been a view that heirs inevitably dismiss a family advisor and turn to a different platform for guidance regarding their new wealth," said Jeff Carlin, Global Head of Wealth Advisory Services at Nuveen. "Yet, our research shows that advisors can continue their role and work with the next generation if they take intentional, specific steps to establish a relationship with a prospective heir before the money is passed down.

"For advisors, the clear message from our research is that familiarity breeds success – and that there are multiple opportunities to well serve the varied needs and goals of 'wealth inheritors' in ways that make for enduring relationships," Carlin said.

Wealth Inheritor Profile: Actively Seeking Advice

For the study, Nuveen surveyed more than 500 investors, including current and likely wealth inheritors, as well as "wealth builders," individuals without a current or likely inheritance.

Future wealth inheritors intend to actively seek advice: 87% plan to have a financial advisor at the time of the expected wealth transfer. Further illustrating the power of an early relationship, 64% of inheritors who were introduced early on to their family's advisor went on to work with that advisor, as opposed to seeking out a different source of advice.

According to the research, 80% of the wealth inheritors who first met the advisor as a child or teen decided to work with the advisor – compared with 54% of those who first met the advisor as an adult or young adult. "Making early connections is critical, but advisors may struggle to think of ways to connect with children and teens," Carlin said. "Advisors should look for such opportunities – for example, by including younger generations in social events -- and take time to understand their interests to better form a genuine connection."

Understanding Financial Goals and Preferred Advice Models of Wealth Inheritors

The research shows that wealth inheritors want to achieve multiple competing goals with their wealth, personal as well as family- and community-oriented. Nearly nine of 10 assign top importance to having enough to support their retirement lifestyle and achieving financial stability and independence. However, nearly six of 10 want to pass wealth to future generations and fund the education of children or grandchildren, and half want to give to charity or fund a financial legacy.

Inheritors are also actively seeking financial advice across multiple sources. Though financial advisors are the top choice for advice and education (65%), many inheritors also rely on family or friends (60%), online research or trading sources (53%) and personal finance news (44%). Only 19% rely on robo-advice.

At the same time, inheritors won't fully outsource management of their wealth to an advisor: nearly seven of 10 inheritors working with an advisor prefer to personally oversee some aspects of their financial plan.

Positioning Practices for Success in Serving Wealth Inheritors

"Advisors should position themselves as advice orchestrators, overseeing the client's overall wealth and planning, and coordinating the efforts of other specialists," said Joy Crenshaw, Head of Global Sales & Advisor Development at Nuveen. "We believe advisors can create a multi-generational pipeline of clients that can help fuel their practice growth."

To help advisors determine their next steps, Nuveen is launching the Generational ntelligence Quotient (GnQ), an assessment tool that will help advisors identify key areas needing attention to help position their practices for success in serving wealth inheritors.

"Advisors are continuously challenged with building new business while nurturing existing relationships, but the good news is that opportunities for new relationships are often close at hand," said Crenshaw. "By understanding what wealth inheritors want and structuring their service accordingly, advisors can capture their share of a multi-trillion-dollar asset opportunity."

Media Contacts:
Sally Lyden Cell: 646-984-1913 Email: [email protected]
E-Soo Kim Cell: 551-244-4919 Email: [email protected]

About Nuveen
Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. Nuveen has $1.1 trillion in assets under management as of 31 Mar 2023 and operations in 27 countries. Its investment specialists offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. For more information, please visit www.nuveen.com.

About the 2022 Nuveen Wealth Inheritor Research Study
Nuveen interviewed 376 wealth inheritors and 143 wealth builders. All individuals interviewed are primary/shared decision makers for financial decisions; have current or projected net worth of $1 million or more and have a current or previous financial advisor or would consider using one. For inheritors, 10% or more of net worth is from or projected to be from an inheritance; builders do not have or anticipate an inheritance.

SOURCE Nuveen