Boomers: Children & Chaos

The WealthCounsel® and Trusts & Estates® Magazine recently published an Annual Industry Trends Survey. The survey compiled data from roughly 1500 industry professionals primarily made up of Attorneys, CPAs, Financial Advisors and Wealth management professionals.

As the President of a Registered Investment Advisory firm, I find these trends interesting as well as insightful.  The report gives us an indication of America’s current financial thinking about money and the road ahead. I wanted to share some highlights from the survey, but more my own interpretation of the mindset of a lot of the current professional service providers in our country.

I believe overall that there’s an optimistic trend that is starting to form. There is however, obvious evidence that two…really one issue is concerning most professionals. By the way, it’s the same issue concerning most Americans, our current spending rate and current national debt. These issues CAN BE addressed and remedied according to most professional advisers, and they believe that it can be done in a reasonable manner.  The challenge unfortunately is the lack of confidence in our entire political body that creates the need for a more proactive view of financial planning. Consider some of the survey results:

– 97% or nearly all respondents expect taxes to increase due to the budget deficit; as a result 71% say they have experienced growth in their practices in 2012, compared to 59% in 2011.

– 57% stated their clients engage in planning primarily to avoid chaos and discord among heirs. This was the number one motivator for Americans to seek out financial and estate planning in 2012, followed by the concern of protecting children from mismanaging their inheritance.

– 50% of estates planning clients are 50 to 69 years of age and 56% responded that they have seen an uptick in the real estate market in their respective regions.

– The top three reasons for seeking out professional service providers (primarily Attorney’s survey group) in 2012 were:

          1)      Trust and estate planning work

          2)      Probate law work

          3)      Business succession and exit planning

– 94% of respondents also see their firm growing over the next five years vs. 89% in last year’s survey.

In conclusion the facts reinforce the feeling that most professional service providers and their clients are becoming optimistic about the overall marketplace. However, the realization that excessive taxation will create an undue burden on their family’s security as well as diminish the value of their estate to the heirs is the overriding concern for most.