Three Keys To Multigenerational Asset Transfer

Experts At Angeles, Regent Peak And Integrated Set Out Top Considerations For Transfer Of High Net Worth Clients’ Assets

Cerulli estimates that $84.4 trillion in wealth will transfer in the “great wealth transfer” through 2045, with $72.6 trillion transferring to heirs and the rest to charities. High and ultra-high net worth clients with substantial amounts that will move to younger generations over that time need advice and guidance to plan for the transfer.

To understand an advisors’ top considerations for multigenerational asset transfers within this clientele, we spoke with industry experts Russ Alan Prince, Strategic Partner at Integrated Family Office; Craig Robson, Founding Principal and Managing Director of Regent Peak Wealth Advisors; and Harry Grand, Partner – Head of New York Office at Angeles Wealth Management.

We asked each of them: What are the top three considerations that financial advisors should bear in mind when working with high net worth clients to ensure a seamless and orderly transfer of assets across generations?

Their answers are here:

Russ Alan Prince, Strategic Partner, Integrated Family Office

Russ Alan Prince, Strategic Partner, Integrated Family Office
Russ Alan Prince, Strategic Partner, Integrated Family Office

While financial advisors and other professionals such as trusts and estates lawyers are familiar with the great wealth transfer, only some are taking steps to help wealthy families and capitalize on this opportunity. Most financial advisors lack the expertise and confidence to talk about what actions the boomers and Silent Generation can take to serve these families best. The following are three actions financial advisors can take to facilitate multigenerational planning that delivers superior results.

  1. Advisors must deeply understand the goals and concerns of the wealthy families they work with. All too often, the focus is on techniques and strategies. For example, most wealthy families will readily sacrifice tax mitigation to address the needs of family members better.
  2. Advisors must also avoid providing singular solutions and help wealthy families make smart decisions instead. All too often, financial advisors and other professionals make recommendations that, more often than not, tie back to their expertise. For wealthy families to get superior results, financial advisors must identify and communicate viable solutions, including the disadvantages and advantages of each, so that wealthy families can make smart decisions.
  3. Finally, financial advisors must oversee a team of leading professionals to deliver multigenerational planning, ensuring a seamless and orderly transfer of assets across generations. Due to financial, personal and family complexity, optimal results are needed from a range of experts.

Craig Robson, Founding Principal And Managing Director, Regent Peak Wealth Advisors

Craig Robson, Founding Principal & Managing Director, Regent Peak Wealth Advisors
Craig Robson, Founding Principal & Managing Director, Regent Peak Wealth Advisors

To maximize value during multigenerational planning, advisors must rethink their approach. Historically, advisors have approached multigenerational planning by preparing assets for the family. However, to achieve true success, advisors should flip their thinking and prepare the family for the assets. To prepare the family for an orderly transfer of assets across generations, advisors should:

  1. Invest time and firm resources into multigenerational family planning. This will require advisors to go deeper and get more granular during family planning conversations, not just with the matriarch and/or patriarch, but across generations. Conversations focused on family governance, legacy planning and shared family values and goals can unlock greater insights into how to best prepare a family for a transition of assets. These conversations should not be “one and done” sessions, but rather ongoing discussions and meetings woven into the fabric of the advisor’s relationship with the family.
  2. Develop and enhance your skills to adapt to different types of conversations, challenges and opportunities, which will permeate from these multigenerational planning meetings. Become trusted within the family as the “go to resource” for the challenges that can arise during multigenerational wealth planning scenarios.
  3. Recognize engagement opportunities throughout your clients’ life journey and take proactive steps to initiate meaningful discussions at relevant points in time. Many families may hesitate to begin the discussion around the transition of assets due to factors such as uncertainty, fear, lack of knowledge, family discord and communication struggles. It is the advisors’ job to educate all family members on the importance of these conversations and make them feel comfortable in expressing their desires and asking questions through the process.

By putting these tactics into action, advisors can not only contribute to the growth of their clients’ wealth but generate harmony and peace of mind within the family.

Harry Grand, Partner – Head Of New York Office, Angeles Wealth Management

Harry Grand, Partner - Head of New York Office, Angeles Wealth Management
Harry Grand, Partner – Head of New York Office, Angeles Wealth Management

When advising high net worth clients on the transfer of assets across generations, financial advisors need to prioritize several key considerations to ensure a smooth transition and preservation of wealth:

Comprehensive estate planning: Estate planning is paramount for high net worth individuals to minimize estate taxes, facilitate asset distribution according to their wishes and provide for beneficiaries’ financial security. Financial advisors should collaborate with estate planning attorneys to draft wills, trusts and other legal documents tailored to the client’s objectives. Regular reviews and updates of these plans are crucial to accommodate changes in family dynamics, tax laws and financial circumstances.

Multigenerational wealth education: Educating heirs about financial responsibility, investment strategies and wealth preservation is essential for sustaining family wealth across generations. Financial advisors can facilitate family meetings or educational workshops to impart financial literacy skills and foster open communication regarding inheritance plans and wealth management principles. Encouraging transparency and involving heirs in financial discussions from an early age can promote responsible stewardship and mitigate potential conflicts in the future.

Risk management and diversification: High net worth individuals often have complex investment portfolios susceptible to market volatility and economic fluctuations. Financial advisors should emphasize risk management strategies and diversification techniques to protect assets and mitigate potential losses.

This includes asset allocation across various asset classes, geographic regions and investment vehicles tailored to the client’s risk tolerance, time horizon and financial goals. Regular portfolio reviews and adjustments are necessary to adapt to changing market conditions and optimize investment performance while safeguarding generational wealth.

By addressing these considerations, financial advisors can effectively guide high net worth clients through the asset transfer process, promoting financial stability and legacy preservation for future generations.

Janeesa Hollingshead, Contributing Editor at Wealth Solutions Report, can be reached at editor@wealthsolutionsreport.com.

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