Americans lose track of financial risks as they accumulate wealth: Report
December 3, 2015 by IFAWebnews Staff
Many Americans aged 34 to 50 lose track of their financial risks as they pursue careers, raise families and accumulate wealth, according to a new white paper from Chubb Personal Insurance. In addition, many neglect to secure sufficient insurance coverage as their wealth increases.
The white paper, “A Lost Generation? Wealth Accumulators Are an Overlooked Opportunity for Advisors,” describes various personal property and liability exposures faced by the approximately 60 million Americans born between 1965 and 1981. It also recommends that wealth advisors work with specialist insurers, agents and brokers to help provide high-net-worth individuals in this age group with effective risk management strategies and insurance coverages.
Stacey Silipo
“Clearly, there is a great opportunity for wealth advisors to work with this age group,” said Stacey Silipo, director of strategic partnerships at Warren, N.J.-based Chubb Personal Insurance. “However, to be successful, advisors will need to better understand these prospective clients and then be in a position to help them minimize all the major risks to achieving their financial goals.”
According to the white paper, many people in their mid-30s to late 40s share the same risk characteristics as younger adults, but often at a substantially greater exposure level. Noteworthy examples include:
They are more likely to acquire secondary or vacation homes in locations subject to fires, flood, storms or other adverse conditions.
They are better able to afford art, jewelry and other valuable possessions, exposing themselves to greater potential for theft and other property loss.
Children can expose them to vicarious liability—and potential financial ruin—through auto and home-related accidents and social media activities.
“It all happens so fast. One day you’ve just graduated law school and you’re in debt and renting a hole-in-the-wall studio apartment. The next day you’re buying a second home, art and a classic car, and then your kids are leaving the nest for college,” said Silipo. “It’s so easy to lose track of time and to lose track of your risks. An advisor can help put you back on track.”
