Preparing clients for the great wealth transfer

October 18, 2018 by Moriah Diedrich

About the author

Moriah Diedrich

Demand generation specialist

Moriah Diedrich is a demand generation specialist at NaviPlan, the financial planning technology provider of choice for more than 140,000 financial professionals.

Within the next 30 to 40 years, an expected $30 trillion in assets will be passed down from Baby Boomers to their heirs in what is being called the “great wealth transfer”. According to a report from the Williams Group Wealth Consultancy, 70 percent of these wealthy families will lose their wealth by the second generation and an astonishing 90 percent by the third generation. So, what can financial advisors do to ensure they can secure the inheritors’ business and help them retain that wealth moving forward?

Start the wealth discussion

Many inheritors lose their money quickly because they were never prepared to properly manage it. Financial advisors can help Baby Boomers by encouraging them to start early conversations around financial security and the importance of financial planning with their children and heirs. These discussions are a great way to not only begin educating the next generation but also to help the family establish how the money should be managed once it is passed down. Additionally, these conversations can shed light on the family’s beliefs and values, which can take the client-advisor relationship to a stronger level.

Prepare for the next generation’s needs

Many advisors are not yet prepared to meet the needs and expectations of the next generation, which results in losing the heirs’ business after they receive an inheritance. Business models and firms should adjust to meet these new expectations, including creating client experiences founded in transparency and control. Tools like the NaviPlan® client portal are built to allow clients to easily access, monitor, and evaluate plan progress and adjustments. Clients are able to manipulate their personalized plans with the “explore your options” feature, giving them even more control over their financial futures.

Reconsider your offerings

When considering how to secure heirs as clients before they receive their inheritance, it is important to look at current offerings and identify any missing pieces. It is likely that heirs currently need advisors who can help with their insurance, cash management, and debt management needs. By providing these products and services, you can capture their business now, build a relationship, and be in a more likely position to continue managing their wealth once they receive an inheritance. Further, firms should consider their ability to provide family estate planning. Advisors who are well-informed of the family’s entire situation can offer better advice and more holistic financial plans, making it easier to retain these clients.

For unprepared families, the great wealth transfer may not be as promising as it was previously thought to be, but preparation on part of Baby Boomers, inheritors, and advisors can make all the difference in proper wealth management. Advisors who manage their own expectations, help initiate family wealth discussions, and ensure their practice is ready to meet the needs of the next generation will find the most success during the great generational wealth transfer.

To learn how a financial planning and wealth management firm increased revenue, reduced expenses, and nearly doubled conversion rates using NaviPlan, click here.