Navigating the Great Wealth Transfer: Insights from Equitable

Understanding the Great Wealth Transfer

The United States is currently witnessing a substantial transformation in its wealth distribution demographic, referred to as the Great Wealth Transfer. This phenomenon involves nearly 11,000 baby boomers reaching the age of 65 daily, contributing to a shift in the control of assets expected to exceed $30 trillion by the end of the decade.

Equitable's Recent Study

Equitable conducted a study targeting financial professionals to enhance their understanding of the anticipated wealth transfer. The study surveyed 500 retail investors, primarily those making household financial decisions aged 35 to 64. These investors typically possess high incomes and are poised to receive significant inheritances—often exceeding $100,000.

Impacts on Wealth Distribution

Notably, millennials are anticipated to be major beneficiaries of this wealth shift. Among those surveyed, 57% of millennials expect to inherit at least $1 million. Interestingly, surviving spouses—largely women nearing retirement—are expected to control a significant portion of the resulting assets over the next ten years.

Building Trust with Financial Professionals

According to Nick Lane, President of Equitable, the key takeaway from the research is the critical nature of trust in selecting a financial advisor. As wealth transitions between generations, individuals will seek support from financial professionals they can trust to navigate these changes effectively.

Strategies for Financial Professionals

The study outlined vital approaches for financial professionals looking to establish and strengthen relationships with potential heirs and beneficiaries. Here are some focal points:

• Understanding Women's Needs: Many women will inherit wealth after the passing of a spouse. This demographic places a high value on retirement planning, with 90% seeking financial professionals who acknowledge their broader life aspirations.
• Engaging with Millennials: As millennials are beginning to inherit wealth while still advancing in their careers, they seek guidance. The survey revealed that 90% of millennials appreciate and trust insights from financial professionals.
• Becoming the Preferred Advisor: A staggering 80% of respondents are inclined to work with a financial professional for managing their newfound wealth. However, only one-third currently have a preferred advisor in mind for when this wealth is received.
• Fostering Trust: Trust emerged as the principal concern for respondents when choosing a financial advisor, with 55% emphasizing its importance above all else.
• Highlighting Guaranteed Income Options: Financial professionals are encouraged to educate clients about various financial strategies, particularly regarding annuities. The research revealed that 70% of women and 80% of millennials are receptive to investing in annuities when recommended.

Adopting a Holistic Approach

Lane stresses the value that adept financial professionals deliver, which extends far beyond numerical figures. Focusing on a client's family dynamics, aspirations, and legacy can lead to better holistic financial guidance and planning.

Equitable's Initiative

Equitable has recently launched the Let’s Plan How platform, aimed at enhancing financial advisory practices and client satisfaction. Recognizing the rising popularity of "How to..." search terms, this program intends to bolster Equitable's presence in the financial landscape.

Understanding the Study and Equitable

This study articulates the perspectives of 500 retail investors with household incomes exceeding $100,000. With an equal representation of genders and age ranges from millennials to pre-retirees, the insights aim to navigate the complexities of wealth transfer.

About Equitable

Equitable, a prominent name in the financial services industry since 1859, provides tailored advice and strategies to individuals, families, and enterprises. With a workforce of over 8,000, the organization remains dedicated to supporting more than 3 million clients nationwide.

Frequently Asked Questions

What is the Great Wealth Transfer?

The Great Wealth Transfer refers to the ongoing shift of wealth in the United States, where baby boomers are bequeathing assets expected to total over $30 trillion by the year 2030.

Why is trust important in choosing a financial advisor?

According to a recent study by Equitable, trust is the most critical factor for individuals when selecting a financial advisor, as it is essential for effective wealth management and support.

What percentage of millennials expect to inherit wealth?

The study indicates that 57% of millennials surveyed expect to inherit at least $1 million, highlighting their significant role in the Great Wealth Transfer.

How can financial professionals engage with inheritors?

Financial professionals can foster relationships with future inheritors by understanding their needs, particularly by focusing on women and millennials, and providing relevant education on wealth management.

What services does Equitable provide?

Equitable offers a range of services including financial advice, retirement planning, and insurance products, all aimed at enhancing clients' financial well-being.

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