An RBC study reveals that most high-net-worth clients have no inheritance plan in place
While high-net-worth (HNW) investors are expected to transfer $400 billion worth of inheritances within a generation, less than 25% have a full plan in place.
A new study conducted by RBC Wealth Management in collaboration with Scorpio Partnership suggests that the majority of Canadians lack a detailed plan to transfer their estate. Furthermore, only one-third are actually ready to receive such an endowment.
The study reached out to 3,105 HNW individuals from Canada, the United Kingdom, and the United States – with an average net worth of US$4.5 million – between June and August. There were 1,054 respondents from Canada, whose average net worth was $3.8 million. The sample population included professionals, retirees, and business owners, as well as givers and receivers of wealth.
“Our research shows that inheritance typically begins at age 29,” said Tony Maiorino, head of RBC Wealth Planning Services. “So Canadians need to act now to ensure their legacy lasts.”
Other gaps were revealed. While almost 70% of Canadian parents have named their children as top inheritors, nearly 60% don’t feel confident in their successors’ ability to preserve or grow their inheritance. Only 37% of parents surveyed are comfortable discussing all the details of their inheritance plans.
As for the recipients, 66% of those who started getting structured financial education before the age of 18 self-rated as confident at making sound financial decisions. On the other hand, 56% got no guidance before they received their financial windfall.
According to Leanne Kaufman, who heads RBC’s estate and trust services unit, families are typically very emotional about succession planning and generally prefer to keep their financial affairs private. She recommended that people speak with a professional and open themselves to receiving advice to preserve the family nest egg.
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A new study conducted by RBC Wealth Management in collaboration with Scorpio Partnership suggests that the majority of Canadians lack a detailed plan to transfer their estate. Furthermore, only one-third are actually ready to receive such an endowment.
The study reached out to 3,105 HNW individuals from Canada, the United Kingdom, and the United States – with an average net worth of US$4.5 million – between June and August. There were 1,054 respondents from Canada, whose average net worth was $3.8 million. The sample population included professionals, retirees, and business owners, as well as givers and receivers of wealth.
“Our research shows that inheritance typically begins at age 29,” said Tony Maiorino, head of RBC Wealth Planning Services. “So Canadians need to act now to ensure their legacy lasts.”
Other gaps were revealed. While almost 70% of Canadian parents have named their children as top inheritors, nearly 60% don’t feel confident in their successors’ ability to preserve or grow their inheritance. Only 37% of parents surveyed are comfortable discussing all the details of their inheritance plans.
As for the recipients, 66% of those who started getting structured financial education before the age of 18 self-rated as confident at making sound financial decisions. On the other hand, 56% got no guidance before they received their financial windfall.
According to Leanne Kaufman, who heads RBC’s estate and trust services unit, families are typically very emotional about succession planning and generally prefer to keep their financial affairs private. She recommended that people speak with a professional and open themselves to receiving advice to preserve the family nest egg.
Related stories:
High-net-worth investors on robo-advisors’ radar
Why succession planning is essential for baby boomer businesses
