Business owners are best prepared to pass on wealth, as almost two-fifths (39%) have a full financial plan in place compared with about a quarter (26%) of employed professionals, RBC Wealth Management has found.
The firm found business people generally had more comprehensive wealth plans in place than other people, including tax and estate planning, as well as retirement and inheritance planning considerations.
It said business owners tended to adopt the same strategies to wealth planning that had brought them success in their own business. This included being proactive in educating themselves on financial matters, being self-reliant and hands-on when managing finances, as well as a talent for strategic planning.
According to RBC's ‘Wealth Transfer Report: Applying the lessons learned in business to wealth transfer', 96% were found to make deliberate efforts to educate themselves on wealth management.
The wealth manager surveyed more than 3,000 respondents in the UK, US and Canada with an average wealth of about £3.5m, from June to August 2016.
Business owners were also found to educate their children about finance from a younger age, at age 25 compared to age 27 for employed professionals. This trend accelerated with younger business owners, of whom a fifth (20%) intended to begin educating their children before the age of 18.
Transferring wealth also topped business owners' concerns when asked to rank the key topics on which they wanted to teach their children - 36% said this was their biggest concern.
Managing director John Younger said: "Culturally and from a demographics perspective wealth is a difficult subject to broach. Talking about money is something that we don't do, which from a generational perspective is wrong."
Younger said research showed having discussions on wealth from a young age was healthy. He said: "The biggest issue with the transfer of wealth is getting it right from the beginning."
Room for improvement
However the research found that there was still room for improvement within this group, as it found just one in five (19%) took advantage of structured financial literacy. The report suggested business owners were less interested in formal learning opportunities on wealth management.
RBC also found that only than half (51%) of business owners had taken the first step in drafting a will, followed closely by 49% of employed professionals. More than a fifth (22%) had not yet started any wealth transfer preparations.
RBC Wealth Management high net worth planning services vice-president Allison Marshall said: "Because business owners are so independent, they may think they don't need support even in challenging situations but from what we've seen, they can benefit significantly from asking for help."
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