While the leaders of wealth management firms may talk a lot about holistic and goals-based wealth management, some advisors apparently haven't gotten the message.

Surprisingly few wealthy clients – about one third – say advisors are talking with them about strategies that achieve their most important family needs and goals, according to a new study of high-net-worth and ultrahigh-net-worth investors by U.S. Trust.

A similarly low number say they are bringing up the subject of planning for longer lifespans with their advisors, and less than a quarter of wealthy clients say they are having similar discussions about strategically using credit.

"We see an enormous opportunity for the wealth management industry to do more," says Chris Heilmann, chief fiduciary officer at U.S. Trust, the brokerage unit of Bank of America serving high-net-worth and ultrahigh-net-worth clients.

The study surveyed 640 wealthy investors with at least $3 million in investable assets, not including the value of their primary home.

Heilmann says the findings show that advisors are more inclined to focus on tactical topics with their clients, such as tax planning or asset allocation.

"But clients want more – they want to delve deeper into important personal and family matters – such as philanthropy, values-based and eldercare planning and teaching their children financial skills. ... There is a huge opportunity and necessity for advisors to broaden the conversation and better communicate with their clients to help them truly achieve their goals," he said in a follow-up email.


The lack of discussion on client needs also extends to the next generation.

Although many wealthy clients want to leave an inheritance to their children, only 25% strongly agree that their children are prepared to inherit the family fortune. And while most rich clients say their family would benefit from establishing a set of principles to guide the purpose of their wealth, only 10% have done so.

At the same time, almost two-thirds of wealthy parents have said little or nothing about the family's wealth to their children. The study's authors say that the parents are concerned that it will affect their children's work ethic.

Heilmann says that this concern has showed up in previous studies, which led U.S. Trust to create a financial literacy program for clients' adult and teenage children, to help better prepare them for their inheritance.

"This is something that we at U.S. Trust took very seriously," he says.


When it comes to the portfolio, 70% of high-net-worth and ultrahigh-net-worth clients say they want to own tangible investments such as real estate or oil and gas properties, but 30% are refraining from doing so because they aren't sure about the risks.

In general, wealthy clients' tolerance for risk is also diminishing: only 36% said they were willing to seek higher returns if it meant higher risk, down from 42% last year.

"Part of this may be that the bull market is aging, and that may be weighing on some investors' minds," says Keith Banks, president of U.S. Trust.

Banks adds that there are also concerns about inflation and when the Fed may raise rates.

"I think all that is weighing on people," Banks says.

Not surprisingly, the rich continue to have a strong interest in doing good deeds with their money. Nearly 90% said that giving back is an essential part of their lives. Traditional forms of giving, such as philanthropy, continue to predominate, but interest in impacting investing continues to rise, particularly among younger clients.

Only 25% of baby boomers either own or are interested in owning impact investments, compared to 50% of millennials.

Despite those figures, advisors don't seem to be tapping into that interest as only 11% of clients reported having a conversation about impact investing with their advisor.


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