Irene Guiamatsia

A third of high-net-worth clients do not want their adviser to discuss the intergenerational wealth transfer according to research from Investment Trends.

The researcher’s 2022 High Net Worth Investor Report found less than half (46 per cent) said their adviser does ask about the transfer of wealth during the advice process – down from 53 per cent in 2019. But 21 per cent said their adviser does not ask about this and would like them to do so.

However, a third said they do not want their adviser to ask about the wealth transfer.

Investment Trends head of research Irene Guiamatsia tells Professional Planner this presents a challenge for advisers.

“But a fantastic opportunity to approach the question with the sensitivity is required to the 21 per cent that want to have the conversation because that offers client acquisition ad infinitum,” Guiamatsia says.

“If you’re able to service families through generations, the onus to continuously acquire new clients diminishes.”

The research estimates almost $2 trillion worth of assets will be passed down to the next generation which equates to 70 per cent of their total assets.

Financial advisers are expected to be the main port of call for inter-generational planning discussions with tax optimisation and wealth preservation being the focus for those that do want to discuss the transfer of wealth.

Millionaires club holds steady

The number of HNWIs has eased over the past year, slightly down from 2021 but ahead of the end of 2020.

The population of those who control over a million dollars in investable assets was 625,000 in 2022, down from 635,000 in 2021, but still much larger than 485,000 in 2020.

Despite this decrease in overall population, the total level of investable assets largely held steady. Collectively, HNWs control $2.82 trillion, up from $2.72 trillion in 2021.

Guiamatsia says 2020 saw an excess of millionaires minted because of the market bubble created during the Covid-19 economic recovery.

“This huge stimulus that we had and the fact there was lots of cash in the system and people were not spending money,” Guiamatsia says. “Equity and property were rising fast.”