Great Wealth Transfer -- To Boomers -- Is Still Going On

“One of the most differentiating findings in the study was that the likelihood to spend the money was much greater among those who did not have a financial advisor,” he said.

Inheritors who did not previously use a financial advisor were more likely to pay off debt than inheritors who had an advisor. They also reported increased levels of personal spending and reported taking vacations, buying a more expensive home, or purchasing a second home, according to the study. The majority of this group was the under the age of 55. Twenty-percent of investors said they used a portion of their inheritance to pay off debt, according to the report.

Lower-net-worth inheritors were also more likely to spend their inheritance or pay bills with it, according to the report. The majority of investors invested at least a portion the funds they received.

The majority of inheritors (91 percent) who had a financial advisor prior to receiving their inheritance said they invested it. Thirty-one percent of that group reported that they also saved some of their inheritance for their children/grandchildren, according to the study.

Working With An Advisor

Older inheritors were less likely to have an advisor. Inheritors who did not choose to use an advisor represented 37 percent of the total group who inherited assets. Forty percent of those individuals were over the age of 71. Thirty-five percent were between the ages 56 and 70, according to the report.

There was significant variation in the types of advisors inheritors chose to work with. Inheritors with greater wealth and a larger inheritance were more likely to use a full-service broker (43 percent). Older inheritors were also more likely to use a full-service broker. Younger inheritors were more likely to use either an independent financial planner or investment manager.

Inheritors valued specific qualities when choosing an advisor. The majority of inheritors, (36 percent) said honesty and trustworthiness were the most important factors in the decision making process. Referrals (15 percent) and investment track record (16 percent) were also significant determining factors, according to the report.

Younger inheritors (55 and under) are most concerned with whether the advisor has up-to-date online services and an updated website (29 percent), the study found. Older inheritors, (age 71 and over) said trustworthiness was most important to them (43 percent).