Unsubscribe

Confirm you would like to unsubscribe from this list

Remove strategy

Confirm you would like to remove this strategy from your list

Welcome to Thornburg

Please select your location and role to help personalize the site.
Please review our Terms & Conditions

For Institutional / Wholesale / Professional Clients

The content on this website is intended for institutional and professional investors in the United States only and is not suitable for individual investors or non-U.S. entities. Institutional and professional investors include pension funds, investment companies registered under the Investment Company Act of 1940, financial intermediaries, consultants, endowments and foundations, and investment advisors registered under the Investment Advisors Act of 1940.

TERMS AND CONDITIONS OF USE

Please read the information below. By accessing this web site of Thornburg Investment Management, Inc. ("Thornburg" or "we"), you acknowledge that you understand and accept the following terms and conditions of use.

Disclaimers

Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be licensed or available in all jurisdictions and there may be restrictions or limitations to whom this information may be made available. Unless otherwise indicated, no regulator or government authority has reviewed the information or the merits of the products and services referenced herein. Past performance is not a reliable indicator of future performance. Investments carry risks, including possible loss of principal.

Reference to a fund or security anywhere on this website is not a recommendation to buy, sell or hold that or any other security. The information is not a complete analysis of every material fact concerning any market, industry, or investment, nor is it intended to predict the performance of any investment or market.

All opinions and estimates included on this website constitute judgements of Thornburg as at the date of this website and are subject to change without notice.

All information and contents of this website are furnished "as is." Data has been obtained from sources considered reliable, but Thornburg makes no representation as to the completeness or accuracy of such information and has no obligation to provide updates or changes. Thornburg disclaims, to the fullest extent of the law, any implied or express warranty of any kind, including without limitation the implied warranties of merchantability, fitness for a particular purpose and non-infringement.

If you live in a state that does not allow disclaimers of implied warranties, our disclaimer may not apply to you.

Although Thornburg intends the information contained in this website to be accurate and reliable, errors sometimes occur. Thornburg does not warrant that the information to be free of errors, that the functions contained in the site will be uninterrupted, that defects will be corrected or that the site and servers are free from viruses or other harmful components. You agree that you are responsible for the means you use to access this website and understand that your hardware, software, the Internet, your Internet service provider, and other third parties involved in connecting you to our website may not perform as intended or desired. We also disclaim responsibility for damages third parties may cause to you through the use of this website, whether intentional or unintentional. For example, you understand that hackers could breach our security procedures, and that we will not be responsible for any related damages.

Thornburg Investment Management, Inc. is regulated by the U.S. Securities and Exchange under U.S. laws which may differ materially from laws in other jurisdictions.

Online Privacy and Cookie Policy

Please review our Online Privacy and Cookie Policy, which is hereby incorporated by reference as part of these terms and conditions.

Third Party Content

Certain website's content has been obtained from sources that Thornburg believes to be reliable as of the date presented but Thornburg cannot guarantee the accuracy, timeliness, completeness, or suitability for use of such content. The content does not take into account individual investor's circumstances, objectives or needs. The content is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services, nor does it constitute investment advice and should not be used as the basis for any investment decision.

Suitability

No determination has been made regarding the suitability of any securities, financial instruments or strategies for any investor. The website's content is provided on the basis and subject to the explanations, caveats and warnings set out in this notice and elsewhere herein. The website's content does not purport to provide any legal, tax or accounting advice. Any discussion of risk management is intended to describe Thornburg's efforts to monitor and manage risk but does not imply low risk.

Limited License and Restrictions on Use

Except as otherwise stated in these terms of use or as expressly authorized by Thornburg in writing, you may not:

  • Modify, copy, distribute, transmit, post, display, perform, reproduce, publish, broadcast, license, create derivative works from, transfer, sell, or exploit any reports, data, information, content, software, RSS and podcast feeds, products, services, or other materials (collectively, "Materials") on, generated by or obtained from this website, whether through links or otherwise;
  • Redeliver any page, text, image or Materials on this website using "framing" or other technology;
  • Engage in any conduct that could damage, disable, or overburden (i) this website, (ii) any Materials or services provided through this website, or (iii) any systems, networks, servers, or accounts related to this website, including without limitation, using devices or software that provide repeated automated access to this website, other than those made generally available by Thornburg;
  • Probe, scan, or test the vulnerability of any Materials, services, systems, networks, servers, or accounts related to this website or attempt to gain unauthorized access to Materials, services, systems, networks, servers, or accounts connected or associated with this website through hacking, password or data mining, or any other means of circumventing any access-limiting, user authentication or security device of any Materials, services, systems, networks, servers, or accounts related to this website; or
  • Modify, copy, obscure, remove or display the Thornburg name, logo, trademarks, notices or images without Thornburg's express written permission. To obtain such permission, you may e-mail us at info@thornburg.com.

Severability, Governing Law

Failure by Thornburg to enforce any provision(s) of these terms and conditions shall not be construed as a waiver of any provision or right. This website is controlled and operated by Thornburg from its offices in Santa Fe, New Mexico. The laws of the State of New Mexico govern these terms and conditions. If you take legal action relating to these terms and conditions, you agree to file such action only in state or federal court in New Mexico and you consent and submit to the personal jurisdiction of those courts for the purposes of litigating any such action.

Termination

You acknowledge and agree that Thornburg may restrict, suspend or terminate these terms and conditions or your access to, and use, of the all or any part this website, including any links to third-party sites, at any time, with or without cause, including but not limited to any breach of these terms and conditions, in Thornburg's absolute discretion and without prior notice or liability.

Decline

Give Us a Call

Fund Operations
800.847.0200

FIND ANOTHER CONTACT
Advising Clients

Clients Often Need Help to Avoid the “Riches-to-Rags” Scenario

Jan Blakeley Holman, CFP, CIMA, ChFC, CDFA, CFS, GFS
Director of Advisor Education
26 Jun 2018
5 min read

As an advisor, it’s in everyone’s best interest to help clients actively manage their legacy wealth.

The old adage “from shirtsleeves to shirtsleeves in three generations” describes the challenge of sustaining family wealth. While it always makes sense to take adages with a grain of salt, this one actually warrants our attention because a 2015 U.S. Trust survey of high-net-worth investors (defined as individuals with over $3 million in investable assets) found that, by the second generation, 70% of family wealth is lost and, by the third generation, 90% has evaporated.

We’ve seen it in the movies and with people we know, wealthy families who at one point had everything—money, prestige, and power—lost it all through a series of missteps and wound up with little or no wealth left to pass on to future generations. While this “riches to rags” phenomenon may not have interested you in the past, today it warrants your laser focus because it speaks to an occurrence that could spark some significant growth in your business: generational wealth transfer.

The Changing Face of the Financial Services Industry

There’s no question that a financial advisory career is attractive. Challenging and energizing, this is a business where you can earn a great living, be your own boss, and actually measure the relationship between your efforts and success.

Like our ever-changing world, the financial services industry is dynamic and never boring. The fast pace and the challenge of navigating clients through volatile markets keep you engaged and interested. But while your interest in and passion for this business are critical prerequisites for success, over the long term your success in this industry actually depends upon your ability to anticipate and adapt to generational change.

Today’s financial services industry doesn’t resemble that of 20, 10, or even five years ago. To remain relevant, we matured, embraced technology and evolved with the times. Now we’re at an inflection point. Created by changing demographic trends such as longevity and generational wealth transfer and industry trends like competition from online, algorithm-driven portfolio managers and increased regulatory scrutiny, you’re being forced to make changes today to remain in business tomorrow.

Today’s Best Business-Building Opportunity—Managing Legacy Wealth

In this business the best opportunities are always found where money movement and consumer needs intersect. For the foreseeable future, you will find those opportunities where there is intergenerational wealth transfer.

Is this Great American Wealth Transfer really significant? Take a look at some of the numbers:

  • According to a 2015 State Street Global Advisors’ survey, “Money in Motion” ( June 2015), $2 trillion is expected to change hands between 2012 and 2017.
  • Accenture’s 2012 white paper, “The ‘Greater’ Wealth Transfer: Capitalizing on the Intergenerational Shift in Wealth,” reported that between 2011 and 2048, baby boomers are expected to transfer $30 to $41 trillion to Generation X and Millennials.
  • Diane Doolin, co-founder of the Institute for Preparing Heirs, tells us that as many as 20,000 estates worth more than $20 million each are transferred each year. For financial advisors, this means that the risk of losing assets and the opportunity of gathering additional assets is greater than it’s ever been.

This transfer of wealth between generations represents a once-in-a-lifetime business-building opportunity, not just because of the amount of money that’s being transferred but because once the money is transferred, research tells us that the heirs will likely move the money to different advisors.

According to a 2013 PriceWaterhouseCoopers Global Private Banking/Wealth survey, when parents die only 2% of heirs leave their money with their parents’ financial advisor. This means that 98% of their heirs move their money to their existing advisor or they choose a new one. Your challenge is to ensure you’re an advisor who keeps your clients’ heirs money and the one who captures assets from other advisors’ clients’ heirs. Becoming a legacy wealth manager is a great way to achieve that goal.

Managing Legacy Wealth

Historically, financial advisors have done a great job of providing clients with investment management strategies geared toward asset accumulation. At some point, clients’ goals change and they shift their interest from asset accumulation to wealth distribution and transfer. When that happens, they expect their advisor to tell them how to establish goals and craft a plan for identifying and managing the wealth they want to transfer to their heirs. Surprisingly, the wealth they want to transfer is not always tangible.

According to “The Four Pillars of Legacy” from Age Wave, “the world’s leader in understanding the effects of an aging population on the marketplace,” there are four critical “possessions” individuals want to pass on to their heirs. In descending order of importance, Age Wave found that 74% want to pass on values and life lessons, 47% want their instructions and wishes to be fulfilled, 43% want to pass on personal possessions of emotional value, and 32% are interested in passing on financial assets or real estate.

What Clients Want to Pass on

Source: Age Wave, “The Four Pillars of Legacy”

Instead of looking for an expert in just transferring tangible property like possessions, securities, and real estate, today’s high-net-worth (HNW) clients want a financial advisor who has the expertise to manage their investments, understands the importance of passing along family values, and has the experience to lead the entire family through a legacy wealth management process that can often be challenging.

Becoming a Legacy Wealth Manager

As with any evolution of a business, financial advisors who become legacy wealth managers climb a steep and fascinating learning curve as they increase their expertise, knowledge, and skills including:

  • Developing a diverse, multi-generational team of advisors.
  • Understanding the characteristics, needs, and differences between generations.
  • Defining the needs of HNW clients and developing a legacy wealth management and client service process to address the HNW clients’ needs.
  • Becoming an expert in leading families through a process that helps them agree upon their family mission, goals, and governance process.

Family wealth that is built over decades can be destroyed in a heartbeat. For HNW families, a financial advisor’s expertise and guidance is often the only thing protecting the family elders and their current and future heirs from making inappropriate or ill-conceived financial decisions that could destroy their family’s wealth.

Going forward, increased competition and lower revenues may force you to acquire more clients and assets just to maintain your current production levels. But as a financial advisor, you are a member of a community of high-achievers who are not content to “stand in place”. You want to move forward and grow your business. To grow your business, consider reinventing your advisory practice and repositioning yourself and your team as legacy wealth managers who understand the challenges of wealth transfer and have a process for solving the problems of prospects and clients who are interested in ensuring their family wealth benefits current and future generations.

Discover more about:

Stay Connected

Subscribe now to stay up-to-date with Thornburg’s news and insights.
Subscribe

More Insights

Advising Clients

The Death of the 60/40 Portfolio? Think Again.

If investment print and internet article headlines give you anxiety, you've come to the right place. In this podcast, Jan shares ideas that may prevent your blood pressure from spiking the next time you read an alarming headline. Plus, the debut of the Ask Jan segment.
Global Equity

Navigating the Post-COVID Resurgence in Travel and Hospitality

As the storm that crushed the travel and lodging industries clears, we see post-Covid investment opportunities and pitfalls in the skies ahead.
Markets & Economy

Is the Fed Gambling with Markets & the Economy?

Jason Brady believes “We're not going to see anything near the Fed's 2% target inflation… forcing the Fed to continue to be very hawkish."

Our insights. Your inbox.

Sign up to receive timely market commentary and perspectives from our financial experts delivered to your inbox weekly.
This field is for validation purposes and should be left unchanged.
Feedback