Citizens survey: Most Americans feel ill-equipped to handle large wealth transfer

PROVIDENCE – Nearly three-quarters of Americans, or 72%, said they lack the financial confidence needed to manage a large influx of money on their own, according to a new survey by Citizens Financial Group Inc.

As baby boomers, the most financially prosperous generation in history, are set to transfer $84 trillion in assets over the next few decades, according to financial research firm Cerulli Associates, subsequent generations are bracing for what’s being deemed “The Great Wealth Transfer,” Citizens said.

Released May 15, the survey of more than 1,500 Americans with an oversample of 500 owners of small ($25 million annual revenue) and mid-market ($25 million to $500 million annual revenue) businesses was conducted by Wakefield Research between Feb. 16 and March 1 using an email invitation and an online survey.

The survey reveals a significant gap in financial confidence and the urgent need for education on the value of engaging a trusted financial adviser, the bank said.

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Sixty-one percent of Americans said they would turn to a financial adviser for guidance if they received a large influx of money, according to the survey, yet the likelihood descends by generation, with 67% of Gen X respondents, 61% of millennials and 59% of Gen Z respondents saying they would consult an adviser or banker post-inheritance.

Thirty-two percent of Americans said they have received poor advice after coming into a large sum of money, and 51% admitted to acting upon financial guidance found on social media, including following advice for saving strategies and investments, the survey found.

While 94% of Americans with financial goals said they recognize the importance of an experienced financial adviser to help achieve them, only 80% said they would consult an adviser, with investing more, saving for retirement and building up their savings as their top objectives.

The survey also found that effective financial advisory relationships rely on mutual understanding, with 65% of Americans emphasizing the importance of communication with their advisers, in addition to a successful track record (61%) and personalized insights (59%).

Sixty-nine percent of business owners said they are not completely confident they could manage a financial windfall on their own. And 60% of business owners said they have experienced negative consequences due to bad financial advice, including lost revenue (35%), increased debt (25%) and had to increase costs (22%).

“Even seasoned business owners can face challenges in managing sudden financial windfalls,” said Don McCree, vice chair and head of commercial banking at Citizens. “High-quality financial advice is critical to long-term success, especially for small and mid-market businesses who may have less margin for error within their balance sheets.”