Imagine inheriting a fortune, only to stumble through decisions about money managers without clear guidance from your loved ones—it's a reality that's unfolding on a massive scale. Over the next quarter-century, a staggering $120 trillion in wealth is poised to transfer to heirs, as projected by Cerulli Associates. Yet, here's where it gets surprisingly counterintuitive: most beneficiaries aren't eager to stick with the financial advisors chosen by their parents or benefactors. In fact, only about 27% of those set to inherit—think widows and adult children—intend to retain their benefactor's wealth advisor, according to a Cerulli survey of investors holding at least $250,000 in financial assets. For heirs who've already received their inheritance, that figure dips even lower to just 20%, based on the report issued in September.
But here's where it gets controversial: it's not that these heirs are rushing to ditch professional advice in favor of going it alone with self-directed investments or trendy digital tools. When surveyed about their choices, half of them revealed they already had their own trusted advisors in place. That's right—many heirs are mature adults with established financial partnerships, perhaps built over years of managing their own careers or smaller inheritances. The next most common reason, cited by 28%, was simply lacking any prior relationship with their benefactor's advisor. Only 14% expressed a desire to avoid working with any financial advisor altogether, and 10% felt the advisor didn't align with their specific investment goals or style. Keep in mind, respondents could select multiple reasons, painting a picture of diverse motivations rather than a one-size-fits-all rejection.
And this is the part most people miss: age plays a huge role in smoothing the transition. As John McKenna, a research analyst at Cerulli, points out, "Keep in mind, if the parents die in their 70s or 80s, the inheritor is between 40 and 60." In many cases, these heirs have already grown into savvy wealth management clients themselves. They've cultivated their own relationships with advisors, and inheriting wealth often means simply layering on new assets to those existing setups rather than starting from scratch with a 'legacy' advisor handed down like an outdated heirloom.
On the flip side, benefactors planning these transfers show a notable indifference toward their heirs' choices. Despite generally expressing satisfaction with their own advisors, Cerulli found that just over a quarter wished their beneficiaries would continue with the same professionals. More than half were either uncertain about it or believed it should entirely be up to the heirs. A small 7% actively didn't want their heirs to use their advisor, and the top reason? A lack of pre-existing relationship between the parties.
Digging deeper into the crux of the issue, Scott Smith, senior director of advice relationships at Cerulli, highlights a troubling reluctance among clients to broach estate planning discussions with their families. Even among high-net-worth investors with over $5 million in financial assets, 20% admitted they planned for heirs to discover details about the wealth only after their passing. But the real number of procrastinators might be higher, Smith suggests, as 34% of wealthy heirs reported learning these crucial facts posthumously. "Benefactors believe that they will talk to their next generation about this stuff before they die," Smith explains. "But when we ask the next generation, these conversations didn't happen." This disconnect creates a missed opportunity for advisors to connect with heirs early on, perhaps through family introductions or educational sessions that showcase the advisor's expertise.
To bridge this gap, Smith urges advisors to proactively encourage their clients to initiate these tough conversations sooner. "Reinforce it with the primary contact that it's important for the survivor to get involved early on so they have their feet securely on the ground and they aren't panicking as soon as it happens," he advises. It's not merely about securing assets for the firm; it's about easing the emotional and practical burden on grieving family members during a vulnerable time. For instance, imagine a widow suddenly thrust into managing millions without prior exposure—early engagement could mean the difference between informed decisions and costly mistakes.
This dynamic sparks plenty of debate: should families prioritize open communication about wealth, or is it reasonable for heirs to forge their own paths? And what if advisors push too hard for early introductions—could that come across as self-serving? We invite you to share your thoughts: Do you agree that inheritance should include estate planning talks, or do you think autonomy for the next generation is key? Have you experienced similar situations in your family? Drop your opinions in the comments below—we'd love to hear differing perspectives and start a conversation!**
