Many inheritors make hasty financial decisions
A recent Capital Group analysis highlights that beneficiaries often rush into financial choices shortly after inheriting assets, despite feeling uncertain about their decisions.
The company suggests this behavior presents a chance for financial professionals to assist them in making well-informed choices and strengthen their ability to manage their newfound funds.
The research explored how equipped inheritors are for the upcoming Great Wealth Transfer and whether they seek expert guidance before committing their inheritance.
Still, 41% proceed with major financial decisions during that initial period, while 91% take some form of action within three months of inheriting.
Key difficulties for beneficiaries
Capital Group cautions that individuals receiving an unexpected financial windfall without a predefined investment approach may face difficulties determining how to allocate their funds, particularly when accounting for legal and tax implications.
“However, 41 per cent still make an important financial decision within that time period, whilst 91 per cent act on the inheritance within three months,” stated Guy Henriques, president of Capital Group’s client division for Europe and APAC.
The study notes that Gen Z inheritors in APAC already maintain established connections with financial advisers, as 92% rely on professional guidance for their inherited wealth.
Advisers’ key role
The survey results demonstrate that inheritors place significant value on expert financial counsel, with over three-quarters ranking an existing adviser relationship as the most important factor when receiving an inheritance. Additionally, 70% reported that early professional advice influenced how they utilized and invested their funds.
However, less than half (48%) fully implemented the recommendations they received, suggesting that trust in advice does not always lead to complete adherence.
Nearly half (49%) of respondents identified an overwhelming number of options or conflicting guidance as major obstacles when managing inherited assets.
Capital Group emphasizes that advisers can address these challenges by tailoring recommendations to each individual’s objectives and investment timeline.
“Trusted financial advice can help inheritors simplify complexity, make confident decisions and build a long-term investment plan,” explained Jorden Brown, head of Capital Group’s client division in Australia.
