Financial advisors of all sizes have been hearing about the impending generational family wealth transfer that is coming. But less than 25% of advisors’ current clients are under 50 according to The Cerulli Report. The opportunity to retain these assets by developing a relationship with these wealth inheritors could create a strong foundation for their practices for years to come.
Contrary to popular belief, beneficiaries mostly chose to stay with their family’s financial advisor. Current articles may lead readers to think otherwise, but 64% of inheritors go on to work with their parents’ advisor. So the opportunity for financial advisors to continue to work with the children of their clients is a strong one.
The Nuveen Wealth Inheritor Study
According to the Nuveen Wealth Inheritor Study, 87% of future wealth inheritors plan to have a financial advisor at the time of wealth transfer. A multigenerational client acquisition approach can tap into this desire. Financial advisors can then achieve higher revenue growth, more new clients and increase retention. With awareness and intention, financial advisors can grow their practice with this type of client in mind. The Nuveen Wealth Inheritor Study indicated that when the existing advisor understands a wealth inheritor’s preferences, success is possible and even likely probable.
Be Aware of Wealth Inheritor Traits
In this study, Nuveen determined some common characteristics among beneficiaries that can be of use to financial advisors when planning for them. This group is actually inclined to work with their family’s existing financial advisors, but are open to working with multiple advisors. They are looking for a fulfilling relationship with a trusted partner. And they are often eager to accomplish multiple goals with their finances. Hungry for financial knowledge, they enjoy being involved in the planning process. Succeed with this group, and these beneficiaries will be happy to talk about you to their friends.
Insights to Working With Wealth Inheritors
We will cover more about engaging with wealth inheritors in detail in later blog posts, but overall understand that their top goals will focus on independence and security. At the same time they are concerned with supporting communities, charities and their own future generations. Make sure your discovery process captures their diverse priorities properly and thoroughly.
Financial advisors can guide this type of client, as they can be overwhelmed but are receptive to advice. Listening to this client’s goals and helping them prioritize options and make plans can help them make a difference on the things that matter most to them.
Be Their Trusted Source
Wealth inheritors do ask family and friends for advice. They do their own research online or through financial education resources. But ultimately 65% of them listen to their financial advisor. They want to understand the decisions they need to make and especially be involved in the process. Serving your client in a teacher-type-role helps you build trust with them. And it also helps give your client the solid understanding of financial planning that they will need for their lifetime.