Advisors have not prepared the majority of wealthy investors for long-term care costs and financial support for extended family, according to a study conducted by U.S. Trust, a unit of Bank of America.

According to the survey, released Tuesday, long-term care costs were unseen risks that were not well reflected in the financial planning process.


Of the 711 high-net-worth adults with over $3 million in investable assets surveyed, 47% have created a financial plan to address long-term care needs that they and their spouse or partner might need, but only 18% have a financial plan that accounts for their parents’ long-term care costs.   

According to U.S. Trust, this lack of planning may hurt wealthy individuals in the long run because 46% of respondents have provided substantial financial support to adult family members other than their own spouse or partner. But 69% do not have a financial plan that accounts for the financial needs of any of these other adult family members.

“The majority of people we surveyed grew up in middle-class families and created their own wealth. They don’t see themselves as wealthy, and many are unaware of risks and circumstances that grow increasingly complex as wealth accumulates,” said Keith Banks, president of U.S. Trust. “The wealthy have been disciplined about protecting their assets from market loss, but may have a false sense of financial security. They are not adequately planning for family health concerns or for the retirement that they want. We need to shift the conversation about wealth management to these important topics and expand their understanding of risk.”


Failing to account for adult family members can harm one’s wealth, but so can real estate values.

Three-quarters of respondents have not adequately factored into their retirement planning any increase or decrease in real estate values., but 23% of retirees and 52% of non-retirees (including 39% of boomers) say primary residential real estate is important to funding their retirement because of shifting investment priorities.

Sixty percent of wealthy investors say asset growth is a higher priority than asset preservation, a reversal of goals from a year ago when 58% said asset protection was more important. Yet, 63% still say that reducing risk and achieving a lower rate of return is more important than pursuing higher returns by increasing risk.


This year’s survey found that generational gaps in attitudes about leaving an inheritance have narrowed and that work ethic and the transfer of financial skills and knowledge have the greatest influence on the next generation.

Forty-two percent agree strongly that their children are/will be well-prepared to handle their inheritance. And few wealthy parents believe their children will be mature enough to handle their wealth before the age of 25.

Just 39% of parents whose children already are age 25 or older have fully disclosed their wealth to their children, while 53% have disclosed just a little and 8% have disclosed nothing at all.

With a lack of confidence over future inheritance management and lack of disclosure, the question is whether children will be able to somehow fill into the shoes of their wealthy parents.

While 88% of parents agreed that their children would benefit from discussions with a financial professional, only 16% of parents have provided, or plan to provide, their children with access to formal financial skills training.

Fifty-one percent of parents, particularly those with young children, think their children feel entitled to a lifestyle that was worked hard for, and 47% worry that, by growing up without knowing what it’s like to go without, their children may not attain the same level of success.


Even with the “high-class” risks that these high net worth individuals have, the study also found a desire to use wealth in a way that reflects personal goals, passions and tangible assets.

Six in 10 wealthy individuals feel that they can have some influence on society through their investments and 45% agree it’s a way to express their social, political and environmental values.

Nearly half (46%) of respondents feel so strongly about the impact of their investment decisions that they would be willing to accept a lower return from investments in companies that have a greater positive impact.

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