The firm’s Wealth Transfer Report 2017 questioned 384 high net worth business owners across the UK, US and Canada, with an average net worth of $6.4m (£4.9m, €5.8m).
It found that business owners compared to other groups of wealthy individuals such as senior executives and sport stars are more likely to transfer some of their assets during their lifetimes.
For example, 40% of entrepreneurs surveyed intend to make lifetime transfers to heirs compared to 32% of employed professionals, who have a higher tendency to transfer all assets upon death.
The report also found that 32% of business owners who have yet to inherit anticipate support from their financial adviser compared to just 14% of those who have already received an inheritance.
Speaking at a roundtable in London on Tuesday, John Younger, managing director of business owners and entrepreneurs at RBC, said: “For financial advisers, the biggest opportunity is to make sure they have all the tools to go to clients and make sure that they understand what they can offer clients.
“This can be in terms of structuring a trust, or a family chair structure or leveraging off their relationships with other families or individuals or specific scenarios that could be relevant.”
Consequently, 20% of respondents cited the “ability to mentor their heirs on responsible wealth management” as a key motivator for lifetime gifting, said RBC.
Another key reason 21% business owners gave for lifetime gifting is that it allows them to see the positive impacts of their wealth by helping their heirs “achieve their ambitions”.
The RBC report also found that 51% of business owners have a will, while 22% have not started any form of wealth preparations.
Case study
RBC highlighted the case of Ryan, the owner of a financial research and boutique consulting firm, who said his peers are increasingly moving away from estate planning where assets are bequeathed on death.
“In our family, plenty of wealth transfer activity is happening prior to death, such as grandparents paying for their grandchildren’s education. People in my circles are increasingly moving away from making a single transfer, they, they often use testamentary trust to defer the transfer of wealth,” he said.
