If you’re a financial advisor, you have probably heard about the great generational wealth transfer that is coming. If you haven’t, you must familiarize yourself right away since it’s an opportunity and a threat to many financial advisors!
The transfer of wealth between Baby Boomers to Generation X and Millennials will be approximately $68 Trillion over the next 25 years. This transfer will make Generation X and Millennials the new wealthiest generation.
The $68 Trillion attached to this generational wealth transfer is a huge opportunity for financial advisors to grow their book of business or maintain their current one by advising the heir of their current clients. It can also be a threat since 80% of heirs will look for a new financial advisor after inheriting their parent’s wealth.
In order to retain continuity with families, it’s important that financial advisors strengthen their relationships with the next generation by planning and making sure they will be able to meet the specific needs of younger clients.
It’s never too early to start the conversation with both the clients transferring the wealth and those receiving the inheritance. Understanding the clients’ goals and intentions early on helps strengthen the relationship between client-advisor. The heirs will also understand what they will receive and how to manage the wealth best.
Some of the best things financial advisors can do to increase client retention include proactive communication, transparency, and initiative.
Here are two great blog posts that can help financial advisors prepare for the generational wealth transfer:
- How do millennials prefer to receive financial advice?
- 5 things you need to do to maintain your image
If you want to go the extra mile to be prepared, take our assessment to find out your strengths and weaknesses when it comes to your relationships with clients!