But many firms aren't asking their clients the right questions: JD Power, the US-based global marketing information services firm, found that despite 71 per cent of investors with named next-gen beneficiaries indicating a willingness to discuss those needs, only 42 per cent have been asked by their advisor to do so.

This is particularly alarming given the median age of 61 years among full-service investors and that, among those who have named next-gen beneficiaries, 33 per cent of the beneficiaries have an account or product with that same firm. 

Michael Foy, director of the wealth management practice at JD Power, told Family Wealth Report that he was “somewhat surprised” by the findings given the magnitude of the anticipated wealth transfer and the demographics of existing clients. “But I think there are also some understandable reasons why it’s as low as it is,” he said.

He added: “First, it’s not necessarily the easiest conversation to have with a client, because it entails acknowledging their mortality. Second, many advisors are themselves nearing retirement , so they may not see the benefit of cultivating next-generation relationships that may not be profitable for many years.” 

Meanwhile, similar to a perceived lack of preparation for inter-generational wealth transfers, some firms are also not proactively preparing for intra-generational wealth transfer events, with 23 per cent of investors in the study indicating that their advisor never interacts with their spouse or partner.

“Asking to include them in annual reviews or other key discussions can help develop a better understanding of the financial goals of the entire household, uncover potential areas where a couple may not be aligned in terms of objectives or expectations, and develop a relationship that can endure beyond the primary client’s lifetime,” Foy told this publication.

“Studies have suggested that 70 per cent or more of assets are lost to the advisor when assets are inherited by the widow of a deceased client. Much of that is because the advisor didn’t try to develop that relationship beforehand,” he said.

JD Power's study measured overall investor satisfaction with full-service investment firms taking into account seven factors: investment advisor; investment performance; account information; account offerings; commissions and fees; website; and problem resolution.