According to the latest Cerulli Report Wealth
Transfer:
Sizing,
Trends,
and Opportunities, $38.2 trillion will be passed from the Silent Generation and first-wave Baby Boomers to heirs and charity between 2011 to 2035. This sizeable addressable asset base presents a substantial opportunity for firms and advisors offering wealth transfer advice and products.
The report explains that spendthrift protection is taking on greater importance for grantorsin particular parentsas they seek to provide lifetime security for their heirs and generations that follow.
The demographic trends that drove the financial industry to develop and distribute retirement income solutions will also lead to the necessity for products and services that address wealth transfer, says Lisa Plotnick, associate director and co-author of this report.
Good consideration of the products their clients will most likely be holding during retirement is key strategy for manufacturers and advisors to lead wealth transfer effectively.
Presently, the insurance industry is most closely aligned with wealth transfer due to the myriad applications of life insurance in this market, and the expertise and infrastructure within the insurance companies that have been performing this function for many years.
Generating new sales is a significant obstacle for the life insurance industry. Products are still very complex and therefore are hard for advisors to communicate.
Several emerging strategies, such as the increasing use of annuities both inside and outside of trusts,can provide retirement income for beneficiaries. In essence, this is bringing retirement income planningfull-circle and linking it with wealth transfer and wealth preservation, continues Lisa Plotnick.
L.D.