4 Ways to Keep Intergenerational Wealth in Your Practice

A recent study discovered that financial advisors lose a staggering 85% of client assets after wealth transfers to the next generation, largely due to a lack of relationship and engagement between the advisor and heirs.¹ With more clients moving toward the asset transfer phase each year, it’s crucial for financial advisors like you to start building strong relationships with the next generation now. Here are four strategies that can help you establish a foundation of trust and retain key relationships for generations to come.

1. Start early: Connect through offerings like financial literacy

While younger heirs may not be ready to invest now, building a relationship with them today increases the likelihood that they’ll contact you when they’re ready to invest tomorrow — and especially when they inherit.

A great way to begin is by offering financial education sessions to your clients’ children and grandchildren. This value-add offering helps prepare the next generation to responsibly steward their inheritance while giving you a chance to show that you care about helping them pursue their financial goals as much as you care about helping their parents or grandparents. 

If you want to leverage existing curriculum, consider a resource like The World of Business Reading Group. Inspired by the writings of Warren Buffett and a team of Harvard Business School alumni, the course equips teenagers with a solid understanding of business concepts and a foundational knowledge of investment principles.

2. Offer family wealth meetings

Another way to connect with clients’ heirs is by offering family wealth meetings as part of your value proposition and engaging with heirs when they’re in your office. Many clients aren’t sure how to broach the topic of wealth transfer with their heirs, and an offering like this one can help start the conversation. In such a meeting, you can walk heirs through their parents’ wealth plans and make sure everyone’s questions are answered. Some clients may not take you up on the offer — but it’s likely others will. For those who don’t, you can also offer client events designed for the whole family and encourage them to invite adult children or grandchildren. 

3. Provide complimentary services to clients’ children and grandchildren

While meeting and getting to know your clients’ heirs is great, working with them is even better. One mistake some financial professionals make is to assume a casual relationship will naturally lead to an established relationship when the assets transfer. But that may not be enough. A recent poll found that over 80% of Generation Z and Millennials seek financial advice.² If you’re not actively addressing their interest, they’re likely to look somewhere else. 

Consider offering complementary planning services to these heirs. Even if they aren’t yet ready to open an investment account, they may be interested in budget planning or a 401(k) consultation. 

Here are some ways to get started:

• In client meetings, mention that you’re offering complimentary, one-time consultations and discounted, ongoing rates for clients’ children and grandchildren.
• Give your clients a brochure or flyer that outlines your service offering for clients’ heirs.
• Ask for an introduction via email, in person at your next client event, or at an all-family meeting at your office.
• At the introduction, be prepared to share your value proposition for younger clients, and suggest a complimentary, one-time consultation.

When speaking with your existing clients about their heirs, mention that you can help make sure they’ll become good financial stewards of the assets they’ll someday receive.

4: Keep the relationship going: Update your service model to attract and retain younger clients 

While starting a relationship with heirs is great, it’s also important to have a service model that can help you develop and ultimately retain the relationship. To make the service model scalable for you as an advisor, consider using model portfolios so you’re not dedicating hours to designing customized portfolios for these clients with likely smaller investment accounts. 

To appeal to the next generation, demonstrate how you can help them in their current life stage — which could include budget assistance or education planning for their kids. Financial planning services attract investors in this group who may prefer to pay for financial plans, hourly consulting, or even one-time consultations. 

By being flexible and designing services models for the next generation of heirs, you’ll be able to offer what these investors need now and well into the future. 

Footnotes

¹ “Seeking to Protect Profits into the Future: Elevate and grow your practice in an evolving landscape,” Goldman Sachs Asset Management, 2022.

² “Over 80% of Gen Zers and Millennials Seek Financial Advice", 401k Specialist, June 2023.