Florida Wealth Transfer Trillions of Dollars

Investment Market
A. Scott Hansen, Managing Director and Senior Portfolio Manager BMO
A. Scott Hansen, Managing Director and Senior Portfolio Manager BMO

NAPLES – As the ‘Boomer Generation’ ages, one of the largest shifts of wealth is going to happen. In the United States, one of the states where people go for their retirement years is Florida. That aging population has positioned the state to be a hotbed of wealth transfer.

According to BMO Private Bank, the state of Florida will be part of the largest wealth transfer in the history of the world, with between $41 trillion and $136 trillion expected to be passed from older Americans to younger generations.*

“To prepare for this enormous transfer of wealth, investors need to keep a close eye on those managing their portfolios,” said A. Scott Hansen, Managing Director and Senior Portfolio Manager for BMO Private Bank in Naples. “This wealth transfer will have a huge impact in Florida, where there is an abundance of wealth and a significant number of senior citizens.” 

Hansen noted that according to a recent report by the Community Foundation titled “Family Philanthropy and the Intergenerational Transfer of Wealth,” Florida will be among the top states in terms of wealth being transferred from one generation to another over the next 10 years.

“Who manages your investments during this time can make all the difference for your portfolio, your heirs and your legacy. To help ensure the orderly and efficient transfer of wealth, investors should look at the overall strength of their wealth management firm, rather than follow the advice of one person. Careful and diligent research is essential in determining the strengths and performance of a wealth management firm — including the firm’s investment platform,” observed Hansen. 

Hansen notes that investors should consider the following when selecting a wealth management firm:

1. Does the firm have a depth of research and a global presence? Farming out their research can have a significant impact on the success of your portfolio. Ask if research is provided internally or from an outside vendor. Additionally, consider the size of the firm and whether it has global solutions that may be a fit for your needs. 

2. Does the firm have a local portfolio manager with an ability to manage? Stronger wealth management firms have on-site portfolio managers who know the client’s individual needs and have the authority to act locally on his or her behalf. It is imperative to know if decisions on your investments would be made in another part of the country or world by a stranger who does not necessarily know you or your goals. 

3. Has the firm’s performance been tested and proven? Be certain to ask for the firm’s most recent prospectus and compare it to others. If you have specific questions about anything in the document, ask for detailed answers.

4. Does the firm have strength and stability? There is strength in numbers and assets under management. Be careful in transferring your portfolio to a startup company that does not have a long-term success story or far-reaching investment services. 

5. Does the firm’s research feature individual equity and fixed income positions? In the current investing environment, it is critical that firms offer insights regarding the value, risk and volatility of a covered security and assist investors in deciding whether to buy, hold, sell, sell short or simply avoid the security in question.

6. Does the firm employ their own Chief Investment Officer? Ideally, wealth management firms should provide meetings or regular investment presentations with their CIO once or twice a year. The most articulate and successful CIOs are respected for their platforms and in-depth knowledge of how a portfolio is affected by the economy, politics and even the weather. Those CIOs at the top of their game are often guests on national news programs, featured in investment interviews and create headlines with their opinions. These wealth professionals can give an investor thoughtful insight into which economic factors are impacting their investments, what markets investors should be monitoring and provide calculated research to support their advice.

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