Everyone is aware of the great transfer of wealth ahead, as the Baby Boomer generation passes their riches on to their heirs.
The lucky recipients, in most cases children, usually referred to sequentially as Gen X and millennials, should feel blessed and grateful. Likely they do, but whether their tidings of joy will extend to their parents’ financial advisor is a matter for debate.
Building relationships with the children of long-term customers should not be left to chance and circumstance. Consultancies have appeared offering seminars and training courses to teach advisors how to engage the next generation. The process must begin long before the client retires or dies. The children’s goals often differ considerably from those of their parents and adjustments will need to be made to investment structures.
This is serious business: statistics show that 90% of children replace the family’s financial advisor in the year after they receive their inheritance.
One expert suggests there are more grounds for hope than fear. The younger generation is actually open to an approach from the family advisor – it’s simply a case of advisors failing to pick up the ball and run with it. Indeed, one specialist cited in the linked article says that when he inherited his father’s business, he quickly fired his father’s advisory firm. The company never bothered to contact him about becoming a client, he said.
A survey among millennials revealed the dire truth: more than 70% say their parents’ advisors have never offered them any financial advice or counsel, despite the fact that it would be welcomed. Perhaps advisors are waiting for the younger family members to approach them. If so, they’re making a mistake of strategic proportions.
For more information, please read:
Will Your Clients’ Kids Freeze You Out? | Financial Advisor Magazine