Preparing for the great wealth transfer

May 11, 2017 by Joanna Mesirow

Two financial advisors discuss obtaining the next generation of clients

About the author

Joanna Mesirow

Business development representative

Joanna develops relationships with financial firms that could benefit from our financial planning and digital solutions. While working with other members of the Advicent team across the organization, she mainly focuses on reaching out to new businesses to understand their needs and determine if our tools could help.

Approximately $30 trillion in assets will shift hands over the next few decades and yet as little as 2 percent of children stay with their parent’s advisor. If your firm currently has a majority of clients in late stages of retirement, it is important to have a strategy in place to prepare for the transfer of wealth. Here are three ideas to consider as you prepare to secure long-term relationships with the children of your current clients:

Be proactive

Hopefully you already have a plan in place to ask for referrals from current clients, as it is a great strategy for developing new business. You provide great service and care about your clients and their long-term financial goals, so this should not be a difficult topic to discuss. It also should not be any more difficult to ask for a connection with the children of your clients, as they are simply another referral.

These next generation clients may or may not be in a strong financial position (yet) to afford all of your services (for more on this, refer to the following section), but the introduction alone builds trust for the future. It can be as simple as having your client invite their child(ren) to the next annual review meeting. If your client does not currently want their child to have this level of insight into their financials, invite them to a separate one-on-one consultation or perhaps host a “lunch and learn” event instead.

Simply put, do not wait until your client passes away to create a relationship with their children. The inroad exists; you just have to seek it out in an appropriate manner.

Offer scalability

As mentioned above, the children of your clients may not be able to afford minimum balances, fees, or other potential requirements you have in place for accepting new clientele. However, by turning these relationships away before giving them a chance to develop, you risk the loss of current assets once they transfer ownership.

Consider offering a light financial plan that addresses long-term goals, such as retirement and major purchases. A simplified plan can start the conversation regarding what they intend to do with inherited assets once they receive them. Not only does this help your firm retain assets, but it can also help these children prevent squandering their inheritance by understanding how it will relate to their long-term goals. Plus, as those children start to develop their own wealth in addition to their inheritance, you can continue to develop their financial plan accordingly and expand the relationship.

Build confidence early with scalable options, and depending on their needs and current assets, they will likely continue to trust you with additional assets as they grow.

Digital strategy

Your client experience matters, as digital accessibility becomes more prevalent in the financial services industry. Senior clients have more tech-savviness than many give them credit for, hence their children also will expect a certain level of tech capabilities from their advisor. From client portal access, to meeting with an advisor via online channels, digital strategy comes in many forms.

Review your current digital approach, and expand or adjust based on the target clients you want to attract in the next 2-3 years and beyond. This does not mean you have to invest in every single type of digital solution available. However, the longer you wait to address the digital client experience, your competitors will likely continue to forge ahead. Consider ease-of-use, multi-channel access, and providing a unique experience specific to your firm. APIs can help you develop a strong story, while also tailoring the experience to your target clientele.

Even if your retired clients have not specifically asked for digital access, if you see the value in attracting their children, this should be on your road map.

Overall, keep in mind that trillions of dollars in assets will transfer to the next generation sooner than expected. By proactively attracting next-gen investors, having scalability in your service offerings, and providing a phenomenal digital client experience, you will be well-prepared to seize the opportunity the upcoming wealth transfer presents.


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