The study comes at a time of continued discussion of how the industry handles an expected $30 trillion transfer of wealth in coming years.

How families get along or fight among themselves are some the hardest matters for wealth advisors to handle, particularly as many clients have no estate plan at all, according to a survey issued today by Key Private Bank. And it found that advisors, rather than clients, are more likely to raise financial planning issues in the first place.

The private bank, part of US-listed KeyCorp, surveyed almost 130 of its client-facing advisors about their experiences of working with high net worth individuals on estate planning. 

Some 77 per cent of respondents said the hardest part of estate planning is “navigating inter-family dynamics”, and 43 per cent said that the biggest estate planning mistake is having no plan at all. The study found that the greatest misconception among clients is that “they are not that old and can plan later,” say half of advisors (49 per cent).

With an estimated $30 trillion of wealth expected to change hands in the coming years as the Baby Boom generation retires and passes away, inter-generational asset transfer and planning are big topics for the sector. 

Having no plan at all is the biggest estate planning mistake, cited by four in ten advisors (43 per cent), followed by not updating documents regularly (35 per cent). Many also say that clients inaccurately believe that a will can oversee the distribution of all their assets (35 per cent).

“Some clients may be hesitant to have a conversation about estate planning with their family members because they fear that sharing their wishes will cause conflict,” Andrea M Griffiths, JD, CWS® national manager Trust Settlement Administration, Key Private Bank, said.

“In designing an estate plan, clients must sort through a number of emotional and psychological issues, ranging from treatment of children - where what’s fair is not always what’s equal - to the beneficiaries’ perception of their relationship with the grantor, as well as their behaviours and potential biases toward other beneficiaries,” Griffiths said.

Challenge
Convincing clients to put an estate plan in place is a challenge, according to 34 per cent of advisors - but it is not as difficult as convincing clients to communicate their wishes openly and honestly with family members (57 per cent). Eight in ten advisors (81 per cent) say that only “some” or “hardly any” clients are having open conversations about their estate plans and wishes with their families. As a result, four in ten advisors (39 per cent) say that half or fewer than half of estate plans holistically capture their clients’ values in the transference of wealth to the next generation.

The poll also revealed that most estate planning conversations are being prompted by advisors (66 per cent) – rather than clients or their family members - further highlighting a need for more proactive family financial discussions and the critical role that advisors play in moderating these conversations.

To see an article back in 2016 about the supposedly "soft topics" of wealth management, see here.