Issue link: https://resources.envestnet.com/i/1527485
Unfortunately, a high percentage of these beneficiaries are expected to change their primary financial advisor when they receive an inheritance. According to a Q2'2018 UBS Wealth Management Investor Watch report titled "Money, myths and modern families," 66% of millennials plan to change advisors. This is backed by several studies including The Cerulli Edge—U.S. Advisor Edition" report, specifically the 4Q 2018 issue which states more than 70% of heirs are likely to fire or change financial advisors after inheriting their parents' wealth. This finding underscores the significance of engaging with clients' children and fostering strong relationships across generations. The Difference a Year Makes While 2021 was not exactly a banner year for bonds, 2022 was the worst year on record for fixed income, according to Edward McQuarrie, an investment historian and professor emeritus at Santa Clara University. The Federal Reserve raised interest rates aggressively, which depressed bond prices, especially for investors in long-term bonds. Nor did stocks perform much better in 2022. All three of the major averages–Dow Jones, S&P 500, and the Nasdaq– suffered their worst year since 2008 and snapped a three–year win streak. The Dow fared the best of the indexes in 2022, down 8.8%. The S&P 500 sank 19.4%, while the tech-heavy Nasdaq tumbled 33.1%. This was due to persistent inflation met by aggressive rate hikes from the Federal Reserve. These hikes battered growth and technology stocks and weighed on investor sentiment throughout the year. Further, geopolitical concerns, the ongoing pandemic, and volatile economic data also kept markets on edge. 2022 Market Returns Source: Morningstar -40 -18 4 26 48 70 Energy Select Sector SPDR® ETF Bloomberg Commodity TR USD Bloomberg US Treasury 1-3 Yr TR USD Bloomberg Municipal Interm 5-10 Yr TR DJ Industrial Average TR USD Russell 1000 Value TR USD ProShares Hedge Replication MSCI ACWI Minimum Vol (USD) GR USD Bloomberg US Treasury 5-7 Yr TR USD S&P 500 Equal Weighted TR USD Materials Select Sector SPDR® ETF Bloomberg US Agg Bond TR USD Russell 2000 Value TR USD Russell Mid Cap TR USD MSCI USA Momentum GR USD S&P 500 TR USD MSCI ACWI Small GR USD MSCI ACWI Momentum GR USD MSCI USA Quality GR USD MSCI ACWI Quality GR USD Technology Select Sector SPDR® ETF MSCI USA Growth GR USD Communication Services Sel Sect SPDR® ETF © 2023 Envestnet, Inc. All rights reserved. For one-on-one use for client's Financial Advisor only. 3