Two thirds (65%) of Gen X and Millennial inheritors say they have regrets about how they used their inheritance money, with nearly two in five wishing they had invested more.
The findings were from a survey of 600 high net worth individuals across Europe, Asia Pacific and the US by investment manager Capital Group.
The research showed almost half (47%) of wealth holders inherited directly from their grandparents, with a majority (55%) having received between $1 million and $25 million. While 18% of millennials turn to financial advisers for investment advice, a bigger percentage (27%) are more likely to turn to social media and ‘finfluencers’ for advice when they inherit.
The survey also highlighted challenges in communicating succession planning. Three in five (61%) wealth holders said they rely on lawyers and 49% on accountants to handle succession matters, while only 15% use financial advisers.
The vast majority (79%) leave no specific wish on how inheritance must be used and the research points to inheritance money often sitting dormant or underutilised. On average, only 22% of inherited capital is invested in securities or mutual funds and 11% in a pension fund.
Overall, six in 10 (60%) wealth holders said they are unhappy about the way they used their inheritance, with one third regretting having underinvested. In the UK, however, 78% of those who sought advice reported feeling better informed about managing their wealth.
Guy Henriques, president, Europe and Asia Client Group at Capital Group, said: “Trillions of dollars are estimated to be transferred from Baby Boomers across the US, Europe, and developed Asia to younger generations in coming decades. Millennials and Generation Z are receiving larger inheritances at a younger age and could benefit from a financial adviser’s market insights and long-term investment perspective
“Our study reveals that most wealth holders wish they had used their inheritance differently and invested more. We believe that by considering investing some of their newly acquired capital, HNW individuals could achieve long-term wealth generation.”
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