Are your Clients investing with their legacy in mind?

While having an estate plan is important for clients’ legacies, it’s equally important to ensure that their money ends up in the hands of their intended recipients.

“What kind of legacy will you leave behind? How will you be remembered? What will your children and your children’s children say about you?”

These questions for clients may seem to be outside the realm of financial advice - too intense, deep and profound to ask during a meeting about their financial needs. But if clients are accumulating assets without considering their legacy, answering these questions can lay the foundation for an estate and legacy plan, including intergenerational wealth transfers.

A recent Sun Life survey reveals that of the 44% of boomers polled who plan to leave an inheritance, less than half (47%) have an estate plan and one quarter (26%) have not discussed their plans with the intended recipient.

While having a will is important for clients’ legacies, it’s equally important to ensure that their money ends up in the hands of how they planned. Clients need to discuss their legacies more and take action to make sure their final wishes are followed according to their wishes.

This is even truer when we consider the importance of the assets that baby boomers intend to leave to their heirs. Boomers who said in the poll that they are giving 100% of their inheritance to their child(ren) intend to leave an average amount of $940,000. That’s a lot more compared to the average $309,000 that millennials expect to receive. This gap increases when boomers work with a financial advisor and expect to leave just over one million dollars.

Millennials expectations

Over half of millennials (57%) surveyed, who expect an inheritance, intend to add it to their retirement savings. This highlights the growing important to ensure the next generation understands how to manage wealth and build a secure financial roadmap for the future. Working with a trusted professional who can offer holistic advice and solutions will be particularly relevant and beneficial to them.

The survey also finds that 55% of millennials, who expect an inheritance, plan to use it towards rising housing costs, followed by 36% using it to pay down debt.

With careful planning during their accumulation years - and your help - clients can leave the legacy they want.

Wealth products with guarantees can provide secure, tax-efficient and dependable pathways for clients to leave their mark. One example is segregated fund contracts, also known as guaranteed investment funds (GIFs). They can provide insurance benefits, such as the ability to name beneficiaries and bypass probate.

Consider the GIFs wealth solution

With GIFs, in the “getting ready for retirement” stage, Clients can participate in the markets but still have protection for legacy goals. For clients in retirement, GIFs can help cover lifestyle expenses, as well as providing guarantees and the potential for investment growth.

Sun GIF Solutions – Estate Series offers:

a 100% death benefit guarantee – the greater of the death benefit guarantee or the contract’s market value at death,
annual automatic resets – the estate value is locked-in annually if market values are higher than the previous guarantee amount, so the death benefit has nowhere to go but up, and
control over legacy settlement – clients’ assets are distributed according to their wishes, with options to allocate money through a payout annuity.

Products such as Sun Lifetime Advantage GIF and Sun GIF Solutions – Income Series can offer lifetime guaranteed income to help cover basic expenses in retirement.

Many Canadians have ideas about their legacy - and questions about how to ensure they can leave a meaningful one. A good foundation for the discussion starts with showing clients how wealth products with guarantees can fit into their estate and legacy plans.