Evolving expectations of financial advisors’ clients are reshaping the role of legacy and estate planning, according to the findings of a study by Wealth.com and Compound Insights, released Wednesday. Compound Insights is the research division of RIA Ritholtz Wealth Management affiliate The Compound Media.
The report, “Living Legacies: How ‘Giving While Living’ and Family-Wide Planning Are Rewiring Advisory Growth,” suggests that family-wide client engagement is associated with stronger business outcomes. Advisors meeting with both partners or all account holders reported generating more new assets and referrals, the firms said. Among advisors who included family in legacy planning conversations, 54% were very or extremely confident the next generation would remain clients.
Operational Complexity
“What stood out most” from the results of a survey of over 400 advisors was that “the barrier to legacy planning isn’t conviction, it’s operational complexity,” Rafael Loureiro, Co-Founder and CEO of Wealth.com, told WSR by email.
“The report shows legacy planning is already widespread, but delivery varies,” he said, pointing out that advisors surveyed cited “friction points” including “complex family dynamics” (mentioned by 39% of advisors), the discomfort of end-of-life conversations (35%), legal complexity and coordination burden.
“The report shows legacy planning is already widespread, but delivery varies.” – Rafael Loureiro
He continued, “That friction frames the next era of growth: firms that standardize workflows and use technology to coordinate documents, stakeholders and communication will scale legacy planning in a way that’s both more consistent for clients and more efficient for advisors.”
‘Giving While Living’
Advisors also reported that, on average, 46% of clients planning to pass assets intended to do that during their lifetimes. For clients with over $25 million in assets, 55% planned to do so.
Those numbers indicated that “giving while living” is “no longer a niche philosophy, but a mainstream priority among affluent families,” the firms said in a news release.
“Advisors are on the front lines of the $124 trillion great wealth transfer, and this research makes clear that legacy planning is no longer optional,” Loureiro said in the news release.
Referencing the report’s data, he added, “Nearly half of clients planning to pass assets are already engaging in lifetime giving, and firms that proactively involve families report stronger growth and greater confidence in retaining the next generation.”
Missing Conversations And Needed Infrastructure
The report also identified what it called a “legacy planning demand gap.” Among advisors surveyed, 37% reported hesitating to offer legacy planning because clients didn’t ask for it. The findings suggested clients and advisors might be waiting for the other to initiate the conversation.
Legacy planning is expanding beyond ultra-high net worth clients, according to the report, driving the need for scalable infrastructure. Among surveyed advisors, 34% said they would adopt AI/automation tools in the upcoming 12 months and 27% planned to use an attorney coordination portal.
“One of the more interesting findings in this report is the disconnect between client behavior and advisor initiation,” Callie Cox, Chief Market Strategist at Ritholtz, said in the news release.
“Lifetime giving is becoming more common, and advisors who formalize family engagement around those decisions seemingly enjoy stronger growth outcomes and greater confidence in retaining the next generation. But at the same time, many firms are still waiting for clients to raise the topic.”
She added, “The opportunity appears to lie in starting these conversations earlier and building a repeatable process around them.”
The study’s findings were based on an online survey of 434 financial advisors conducted between Nov. 26 and Dec. 21, the report said.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
