Citizens Survey Finds Majority of Americans Ill-Prepared for Historic Multigenerational Wealth Transfer

Nearly three quarters of Americans (72%) lack the financial confidence needed to manage a large influx of money on their own, according to a new survey by Citizens. As Baby Boomers, the most financially prosperous generation in history, are set to transfer $84 trillion* in assets over the next few decades, subsequent generations are bracing for what’s being deemed, ‘The Great Wealth Transfer.’ The survey, released today, offers insights into Americans' preparedness to handle significant inbound wealth, underscoring the critical need for expert financial guidance.

"A staggering amount of personal wealth is projected to be passed on to heirs in the coming years, making it the largest transfer of assets in U.S. history,” said Brendan Coughlin, Vice Chair and Head of Consumer Banking at Citizens. "Despite the fact that the majority of Americans acknowledge the importance of having an experienced financial advisor, our new survey shows that more than 50% of Millennials and Gen Z adults have received poor advice in the past. This sharply underscores an opportunity for seasoned wealth managers to foster meaningful, trusted relationships with customers and take market share from the large incumbent wealth firms. At Citizens, we are committed to guiding our customers with personalized advice throughout their financial journey.”

The Citizens survey of more than 1,500 Americans with an oversample of 500 owners of small and mid-market businesses (SMBs), reveals a significant gap in financial confidence and the urgent need for education on the value of engaging a trusted financial advisor. Additional key findings include:

The Great Wind-fail?

• As the ‘Great Wealth Transfer’ accelerates, nearly one-third (31%) of Americans anticipate receiving an inheritance within five years, with Millennials (55%) and Gen Z (41%) among those who feel it’s most likely in their future.
• A majority of Americans (61%) would turn to a financial advisor for guidance if they received a large influx of money, yet the likelihood descends by generation – Gen X (67%), Millennials (61%) and Gen Z (59%) would consult an advisor or banker post-inheritance.
• Nearly one-third (29%) of Americans report they would need to receive an inheritance of at least $1 million to seek professional direction on how to manage it.

It’s a Matter of Trust

• In an era when financial advice is abundant, especially online, just under a third of Americans (32%), particularly Millennials (54%) and Gen Z (51%), say they have received poor advice after coming into a large sum of money.
• Most Americans (51%) admit they have acted upon financial guidance found on social media, with nearly one-quarter following advice for saving strategies and investments (23% each).

Achieving Financial Goals

• A whopping 94% of Americans with financial goals recognize the importance of an experienced financial advisor to help achieve them. Eighty percent would consult an advisor, with investing more (29%), saving for retirement (29%) and building up their savings (28%) as their top objectives.
• Effective financial advisory relationships rely on mutual understanding, with 65% of Americans emphasizing the importance of communication with their advisors, in addition to a successful track record (61%) and personalized insights (59%).

Putting Newfound Wealth to Use

• While many are unsure how they would manage a windfall, they do have thoughts around how they would spend it – 34% of American say they would start a new business and 33% would invest it in a family member's education.
• More than a third of respondents are eyeing a new car (36%), while more than a quarter of Americans (26%) dream of traveling the globe, and one in five (20%) would buy a vacation home.

Businesses Brace for Change

• The majority of SMB owners (69%) are not completely confident they could manage a financial windfall on their own.
• Sixty percent of SMB owners have experienced negative consequences due to bad financial advice, including lost revenue (35%), increased debt (25%) and had to increase costs (22%).
• When it comes to how business owners would spend a windfall, 38% would start a new business, 37% would travel the world and 32% would buy a vacation retreat.

"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.”

To see more results from Citizens’ survey on inheritance and consumer financial confidence, please click here.

*According to financial research firm Cerulli Associates

Methodology

This Citizens survey was conducted by Wakefield Research (www.wakefieldresearch.com) among 1,500 nationally representative US adults ages 18+, including an oversample of 500 business owners of small and mid-market businesses, between February 16th and March 1st 2024 using an email invitation and an online survey. Small businesses are defined as those with annual revenue of up to $25M and mid-market businesses are defined as those with annual revenue of $25M to $500M. Data has been weighted.

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $220.4 billion in assets as of March 31, 2024. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a full-service customer contact center and the convenience of approximately 3,300 ATMs and approximately 1,000 branches in 14 states and the District of Columbia. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers a broad complement of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, interest rate and commodity risk management solutions, as well as loan syndication, corporate finance, merger and acquisition, and debt and equity capital markets capabilities. More information is available at www.citizensbank.com or visit us on Twitter, LinkedIn or Facebook.

Citizens Wealth Management (in certain instances DBA Citizens Private Wealth) is a division of Citizens Bank, N.A. (“Citizens”). Securities, insurance, brokerage services, and investment advisory services offered by Citizens Securities, Inc. (“CSI”), a registered broker-dealer and SEC registered investment adviser - Member FINRA/SIPC. Investment advisory services may also be offered by Clarfeld Financial Advisors, LLC (“CFA”), an SEC registered investment adviser, or by unaffiliated members of FINRA and SIPC providing brokerage and custody services to CFA clients (see Form ADV for details). Insurance products may also be offered by Estate Preservation Services, LLC (“EPS”) or an unaffiliated party. CSI, CFA and EPS are affiliates of Citizens. Banking products and trust services offered by Citizens.

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