RALEIGH,
N.C., Oct. 28, 2024 /PRNewswire/ -- First
Citizens Wealth, the wealth management division of First Citizens
Bank, today published new results from its "Beyond Wealth" study
that offer fresh insights about affluent business owners. Key
findings include:
- A bare majority (52%) of affluent business owners say they know
exactly how much their business is worth. And a large share of
those (44%) aren't confident in that assessment.
- Less than half of affluent business owners (47%) say they have
a plan for exiting their business, while only a third (33%) feel
very prepared to exit.
- One in five (20%) affluent business owners plan to leave their
business in the next five years, with one third (37%) planning to
retain ownership for at least another decade.
The "Beyond Wealth" study surveyed affluent individuals across
the United States with more than
$500,000 in investable assets,
including a subgroup of affluent business owners.1
"This latest installment of our Beyond Wealth study delivers
compelling insights into how affluent business owners perceive
business valuation and exit planning," said Michael Wilson, executive vice president and
lead executive for First Citizens Wealth.
"Our findings show that these business owners clearly recognize
the value of professional guidance when it comes to exiting their
business. But many of these same business owners seem to be missing
out on benefits of professional advice earlier on in their business
ownership journey," Wilson added.
Business valuation
Nearly all affluent business owners (87%) have some idea of how
much their business is worth, the study found, but only half (52%)
believe they know exactly what their business is worth.
Only three in five (62%) affluent business owners have performed
a formal valuation of their business, which has most often been
done with a professional advisor (76%).
Still, only half of affluent business owners who know their
business' worth feel very confident in the value assessment.
"Knowing the value of your business today is important because
the opportunity to exit could arise unexpectedly and at any time,"
said Nerre Shuriah, senior director of wealth planning at First
Citizens Bank.
"You could end up exiting your business on your timeline. On the
other hand, a big life change or a surprise offer could have you
exiting sooner than you anticipated," she continued. "Either way,
having confidence in what your business is worth makes a huge
difference in streamlining the exit process."
Business succession
Only about half (47%) of affluent business owners have a plan
for exiting their business and only one third (33%) feel well
prepared to do so.
The most likely exit strategies among survey respondents are
selling or giving the business to a family member (31%) or selling
to another business owner (19%). One in seven (15%) say they don't
know how they will exit their business.
About half (50%) indicate their family members are interested in
taking over the business after they retire, though only two in five
(43%) have brought their family into the business.
"We know that it can be difficult to zoom out from the
day-to-day of running a business to develop an exit plan,
especially if you're unsure of how or when the exit will happen,"
Shuriah said.
"Working with a professional business advisor can help you take
a step back and evaluate your business from an outside perspective,
so that you have a full understanding of your business to develop
an informed exit plan that meets your end goals," she
continued.
"And if those goals involve passing down your business to family
members, a professional advisor can empower you to have those
notoriously difficult money conversations with the next
generation," Shuriah added.
Advisor Services
Affluent business owners recognize the importance of
professional advisory services. They are significantly more likely
to have a professional financial advisor (85%) in comparison to
affluent Americans who are not business owners (68%). They are also
significantly more likely to have created a financial plan (88%) in
comparison to their non-business owner counterparts (60%),
especially with a financial advisor.
"It seems contradictory that affluent business owners are more
likely to have professional financial advisors and plans, yet most
still are not very prepared to exit their business," said Wilson.
"These findings highlight an opportunity for business owners to be
proactive in preparing for the inevitable succession of their
business, regardless of when it might happen."
For more insights from the Beyond Wealth study by First Citizens
Wealth, download the report.
First Citizens Wealth empowers clients with a comprehensive
set of services and solutions to help meet their unique and
evolving needs. The team's holistic approach, goals-based strategy
and personalized service help ensure clients can make smart
decisions at every stage of their financial journey.
About First Citizens Bank
First Citizens Bank helps
personal, business, commercial and wealth clients build financial
strength that lasts. Headquartered in Raleigh, N.C., First Citizens has built a
unique legacy of strength, stability and long-term thinking that
has spanned generations. First Citizens offers an array of general
banking services including a network of more than 500 branches and
offices in 30 states; commercial banking expertise delivering
best-in-class lending, leasing and other financial services coast
to coast; innovation banking serving businesses at every stage; and
a nationwide direct bank. Parent company First Citizens BancShares,
Inc. (NASDAQ: FCNCA) is a top 20 U.S. financial institution with
more than $200 billion in assets and
a member of the Fortune 500™. Discover more at
firstcitizens.com.
About the Survey
1 The online survey was
conducted among a sample of 1,000 Americans with greater than
$500,000 in investable assets,
including a subsample of 500 business owners, in April 2024 by Logica Research.
Disclosures
First Citizens Wealth™ (FCW) is a
marketing brand of First Citizens BancShares, Inc., a bank holding
company. The following affiliates of First Citizens BancShares are
the entities through which FCW products are offered. Brokerage
products and services are offered through First Citizens Investor
Services, Inc. ("FCIS") , a registered broker-dealer, Member
FINRA and SIPC. Advisory services are
offered through FCIS, First Citizens Asset Management, Inc. and SVB
Wealth LLC, all SEC registered investment advisers and affiliated
entities. Insurance products are offered through FCIS, a licensed
insurance agency. Banking, lending, trust products and services,
and certain insurance products and services are offered by
First-Citizens Bank & Trust Company, Member FDIC, and an
Equal Housing Lender and SVB, a division of First-Citizens Bank
& Trust Company.
MEDIA RELATIONS:
Lexa Losey
Lexa.Losey@firstcitizens.com
Liz Shapiro
Elizabeth.Shapiro@firstcitizens.com
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SOURCE First Citizens Bank