The Montreal-and Toronto-headquartered firm's latest report suggests that high net worth individuals in the UK are inadequately prepared when it comes to their inheritance planning.

Less than a quarter of high net worth individuals in the UK have a full wealth transfer plan in place, a somewhat shocking statistic considering $4 trillion is expected to be passed onto the next generation in coming years, according to a new report by RBC Wealth Management.

The wealth management arm of Canada's largest bank last year commissioned a survey of 3,105 individuals with an average net worth of $4.5 million from the UK, US and Canada. These included professionals, retirees and business owners, as well as benefactors and heirs. 

The results showed that just 24 per cent of UK-domiciled HNW individuals had established a full plan for how they intend to pass their assets to the next generation. Some 30 per cent of respondents said they had “done nothing” to prepare the transfer of their estate to heirs. 

This lack of planning appeared to continue through generations as the same group of respondents reported receiving “no specific preparation” themselves when they inherited their wealth, RBC Wealth Management said. Only 35 per cent of UK respondents said they discussed reasons behind their specific wealth transfer plans with parents or benefactors prior to inheriting assets. 

HNWIs in the UK appeared to be the most proactive at educating themselves on financial matters; some 64 per cent of UK respondents said they conduct their own research to improve their financial literacy, compared with 55 per cent in the US and 52 per cent in Canada. More than half, or 53 per cent, of UK respondents said they have began educating their children on wealth and money topics, but, perhaps surprisingly, 14 per cent of the UK sample said they have “no intention” of educating their children about money at all. 

Despite this proactive approach, UK respondents scored their confidence in financial matters at 6.6 out of 10, a sign there is still room for improvement. 

RBC Wealth Management's report highlighted a direct correlation between preparedness and confidence levels. Some 58 per cent of those who claimed they are “fully prepared” also said they were “confident” that their fortunes will stand the test of time. 

The firm is set to release an additional four research papers throughout 2017, which they said will explore the challenges and opportunities women, small business owners, blended families and Millennials face when it comes to inheritance.