Inheritance patterns are shifting as the ‘great wealth transfer’ gets underway, which will have significant implications for wealth distribution and financial markets, according to Capital Group.

The investment manager’s survey of high net worth individuals (HNWI) in Europe, Asia Pacific, and the US indicated that HNW families were accelerating the transfer of wealth to their beneficiaries.

Nearly half (47 per cent) had inherited directly from their grandparents, with 55 per cent having received between $1m and $25m.

Millennials were found to be more likely to turn to social media and ‘finfluencers’ for investment advice when they inherit wealth (27 per cent) than to financial advisers (18 per cent).

However, 65 per cent of Gen X and Millennial inheritors said they felt regret about how they had used their inheritance.

Three-quarters (75 per cent) of wealth holders cited challenges in communicating succession planning, with 61 per cent and 49 per cent relying on lawyers and accountants respectively to handle succession matters, and just 15 per cent using financial advisers.

However, financial advice was more prevalent in the UK, with 36 per cent of UK-based inheritors consulting advisers and 32 per cent seeking succession planning advice from advisers.

Capital Group found that 79 per cent of wealth holders had not left any specific wishes on how they would like inheritance to be used.

Inheritance money was often sitting dormant or underutilised, according to the study, with only 22 per cent of inherited wealth invested in securities or mutual funds and 11 per cent in pension funds, on average.

UK wealth holders were more likely to put their inheritance into savings (17 per cent compared to 12 per cent globally).

While 60 per cent of global wealth holders were unhappy about the way they used their inheritance and 33 per cent regretted having underinvested, 78 per cent of UK wealth holders who sought advice felt better informed about managing their wealth.

“Trillions of dollars are estimated to be transferred from Baby Boomers across the US, Europe, and developed Asia to younger generations in coming decades,” commented Capital Group president, Europe and Asia client group, Guy Henriques.

“Millennials and Generation Z are receiving larger inheritances at a younger age and could benefit from a financial adviser’s market insights and long-term investment perspective.

“At Capital Group, we have built enduring partnerships with wealth managers, grounded in the belief that expert financial advice and strong long term investment returns drive better outcomes for wealth holders and their beneficiaries.

“Our study reveals that most wealth holders wish they had used their inheritance differently and invested more.

“As a firm with 94-years of experience, we have partnered with clients to invest over multi generations, and as markets move up and down, it is important to remember the importance of staying invested for the long term.”

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