As more seasoned advisors look toward retirement – according to Cerulli, over a third of the current United States financial advisors are set to retire over the next 10 years, representing 38% of headcount and 42% of assets – we’re also in the midst of the largest transfer of generational wealth in history. Research indicates that $84.4 trillion is set to change hands by 2045, with 86% of this wealth being passed between generations.
The opportunity is clear for advisors willing to prioritize serving not just their existing clients, but the next generation of investors. For those who haven’t made multigenerational connections yet, it’s time to start.
Let’s take a closer look at how advisors can leverage these simultaneous shifts to transform the client experience and grow their firms.
The Power of Goals-Based Financial Planning
Taking a goals-based approach to financial planning organically opens the wealth conversation to multiple generations. Rather than focusing exclusively on performance, goals-based planning enables advisors to address the unique aspirations, values, and concerns of each family member, giving them a better understanding of the distinct financial goals across generations and empowering comprehensive strategies that resonate with both older clients and their heirs.
Recent industry research indicates that this is at least somewhat underway. According to AdvisorHub, 89% of financial advisors report their clients have a wealth transfer plan in place, with 65% bringing their children or parents to meetings to discuss these plans.
Bridging Generational Gaps
To successfully retain the next generation of clients and the assets they’re set to inherit, though, advisors need to adopt modern strategies for building trust and rapport, including:
- Regular Check-ins: With 77% of advisors discussing wealth transfer plans at least quarterly, staying on top of long-term priorities is crucial.
- Leveraging Technology and Digital Media: Meet the next generation of clients where they are to stay top of mind and continue supporting the planning conversation.
- Educational Initiatives: Organize workshops or seminars tailored to different generations, addressing their specific financial concerns and goals.
The Advisor's Evolving Role
During wealth transitions, the role of the financial advisor becomes even more pivotal. Clients on both sides need support:
- Older generations require guidance about passing on their wealth while still protecting their own financial security.
- Younger generations need help developing financial knowledge, establishing goals, and preserving their inheritance.
While 36% of financial advisors report that their client conversations focus more on establishing and growing wealth for use during the client's lifetime rather than on wealth transfer, it’s critical to introduce the impact of transferring wealth into these discussions so both generations feel informed and prepared when the time comes.
Research underscores this importance: only 23% of individuals feel prepared to pass down an inheritance, and only 25% of younger generations feel ready to receive one. These statistics highlight the valuable role an advisor can play in bridging the preparedness gap and making sure wealth transfers smoothly.
Seizing the Dual Opportunity
Multigenerational financial planning, using an approach grounded in client goals, offers a win-win scenario for both advisors and clients. For advisors, it presents an opportunity to expand their client base, retain assets across generations, and build deeper, more meaningful relationships with entire families. For clients, it ensures that their financial legacy is preserved and that younger generations are equipped with the knowledge and support they need to manage their inheritance wisely.
Our recent whitepaper, The Power of Goals-Based Financial Planning: How Technology Helps Advisors Improve Client Relationships and Drive Growth, explores how technology can lower the barrier to more effective multigenerational client conversations while enabling advisors to ensure the successful implementation of goals-based plans.
Just For You
Subscribe to the blog
The best source of information on wealth management, etc.
