We’ve recently discussed wealth inheritors in detail, illustrating the need to engage them around their top goals: independence and security. As a financial advisor, you can guide this type of client keeping in mind that although they might feel overwhelmed with financial information, they are ready to learn and participate. And here, listening to their goals and helping them prioritize is key.
Engage with Them as a Trusted Source
Being a trusted source for wealth inheritors means operating in a somewhat competitive field: beneficiaries do ask family and friends for advice, do their own research online, as well as explore other types of sources of advice. But as the Nuveen Wealth Inheritor Study points out, 87% of them plan to have a financial advisor at the time of wealth transfer.
Younger Generations Are Underrepresented in Your Book
Less than 25% of advisors’ current clients are under 50, and only 30% of advisors are actively prospecting or engage clients under 40. This means the lion’s share of wealth transfer opportunities are ready to talk to you! Identify new potential clients from your existing relationships.
- Who will transition assets?
- Who will inherit assets?
- Who may need advice?
Connect and Engage Wealth Inheritors Effectively
With an effective communication strategy, you can nurture these connections and convert them into clients. The majority of your clientele expects to receive wealth transfer advice, but very few actually do. Engage with inheritors, as they will respond to:
- Open communication and alignment on goals.
- Financial literacy curriculum.
- Protection and preservation of the family wealth.
- A dynamic family values framework.
Identify ways to thoughtfully connect and engage with inheritors. Hold an annual event like a family meeting or celebration of a holiday like Grandparents’ Day. Celebrate milestones with them such as birthdays, anniversaries, new babies, starting college, graduation, promotions and more. Look for ways to include younger generations in social events, and take time to understand their interests to better form a genuine connection. The earlier those connections happen, the better as 80% of wealth inheritors decide to work with the family financial advisor when they are introduced to them as a child or teen.
Meet Wealth Inheritors Where They Are with Engaging Financial Lessons
Leverage education for better engagement. As a younger person ages, they’ll need financial lessons that correspond to their life journey. Through a relationship-driven approach, you can be the source of this knowledge sharing educational materials, links and trusted information for topics like spending vs saving, taxes, debt, investment alternatives, philanthropy and the like.
Advisors need to be flexible, developing models that allow inheritors to engage in the process at a level that suits their interests and time constraints. Technology will play a huge role in creating these flexible, multichannel forms of engagement. Advisor characteristics that drive wealth inheritor satisfaction include:
- Being a trustworthy advisor who acts with integrity and has relevant knowledge and credentials.
- Being an advisor who understands an inheritor’s financial needs and goals and puts their best interests first.
- Giving a personal touch to every connection by proactively offering good ideas that align with the inheritor’s preferences.
- Being a thoughtful custodian who manages investments well and monitors progress toward goals.
- Demonstrating innovation and giving access to great technology to communicate and to track investments.
Consider Aligning Your Team with the Wealth Inheritors
As beneficiaries prefer to personally oversee some of their financial planning according to Nuveen, they’re looking to engage with their financial advisor with a lot to accomplish in mind. And they want to work with financial teams who identify with them. For instance, by 2030, women will control two-thirds of wealth. And Millennials are ushering in the most diverse adult generation in American history. Multi-generational teams with younger team members show a greater percentage of revenue growth and add more clients than teams without younger members.
Building an inclusive team is the way to drive success with the beneficiary. 87% of the time inclusive teams make business decisions 2x more quickly and with better results. Add younger team members by building an internship program with your local university or networking with local organizations. Audit your job postings to make sure you’re appealing to a younger financial advisor.
Engage the Wealth Inheritor For Life
At Integrated Advisors Network, we believe in a service-before-self mentality. We’re here to support our independent financial advisors and power their practice — allowing them to maximize their business. We hope understanding the wealth shift and engaging with future wealth inheritors successfully will help our clients sustain and grow their companies now and in the years to come. Generational wealth transfer creates once-in-a-lifetime opportunities. Pursue them with action and intent.