U.S. Consumers are Unprepared for Coming Wealth Transfer, New FIS Study Finds
May 16, 2018
- Only 10% of U.S. respondents to 2018 FIS PACE study expect to receive an inheritance in next 10 years, despite trillions of dollars of household wealth expected to transfer to younger generations.
- Less than a quarter of U.S. consumers plan to use services of a trusted financial institution or advisor to handle an inheritance.
- Younger respondents more likely to be working with a financial advisor from their primary financial institution.
JACKSONVILLE, Fla., May 16, 2018 – A new study from financial services technology leader FIS™ (NYSE: FIS), has found that U.S. banking consumers may be largely unaware of and unprepared for the impending transfer of trillions of dollars of intergenerational wealth.
Just one in 10 U.S. consumers who took part in the 2018 FIS Performance Against Customer Expectations (PACE) study said that they expect to receive an inheritance in the next 10 years. Only 9% of U.S. consumers aged 27-52 reported that they expect to receive an inheritance in that period. This is despite the fact that nearly $9 trillion of household wealth and assets are expected to transfer from Baby Boomers to Gen X and millennial Americans in the coming decade.
When asked who they would turn to for advice in handling an inheritance, less than a quarter of the U.S. consumers surveyed by FIS said they would use the services of a trusted financial institution or advisor. Nearly half of Gen Xers (aged 38-52) said they would first turn to a friend or family member for inheritance advice.
Only 29% of all respondents, and just 20% of Gen Xers, reported that they are currently working with a financial advisor. Younger respondents were more likely to be working with a financial adviser from their primary financial institution. Respondents under the age of 37 indicated they were more likely than older generations to use a financial institution for inheritance advice.
Respondents across all age categories indicated that their top priorities for using an inheritance would be to save for retirement or to make financial investments, versus buying property or making a luxury purchase.
“These findings should provide a wakeup call to banks and investment advisors: your customers are not thinking about their financial futures,” said Brian DuVal, head of FIS Wealth and Retirement. “The good news is that U.S. consumers recognize the importance of financial and investment planning, and have a high level of trust with their primary financial institutions.
“For financial services firms, this represents both a challenge and opportunity,” DuVal continued. “The challenge is to do a better job of educating their customers on wealth and retirement topics. The opportunity is to engage with consumers - now - to help them get ready for the tidal wave of money and assets that are about to flow into their pockets. The earlier you engage, the better your chances of building a long-lasting relationship with younger banking consumers.”
FIS provides wealth and retirement technology and services to more than 1,000 firms around the world that collectively administer more than $7 trillion in assets.
About the PACE Study
In its fourth year, the annual FIS Performance Against Customer Expectations (PACE) study provide a snapshot on how well banking providers are meeting the expectations of their customers. The 2018 report surveyed 1,788 U.S. consumers across all age and sociodemographic segments to rate their primary banking providers’ performance against nine key performance indications (KPIs). Surveys were conducted online. To read the full report, visit the PACE 2018 experience.
FIS is a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, and outsourcing solutions. Through the depth and breadth of our solutions portfolio, global capabilities and domain expertise, FIS serves more than 20,000 clients in over 130 countries. Headquartered in Jacksonville, Fla., FIS employs more than 53,000 people worldwide and holds leadership positions in payment processing, financial software and banking solutions. Providing software, services and outsourcing of the technology that empowers the financial world, FIS is a Fortune 500 company and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.
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