Practice Strategies

How To Retain Clients During Great Wealth Transfer

Susan R Schoenfeld and Carol R Kaufman May 17, 2023

How To Retain Clients During Great Wealth Transfer

The unfolding inter-generational transfer of wealth from Baby Boomers to their descendants presents challenges and opportunities for trusted advisors.

If there is a “meta-theme” that underlies many North American wealth managers’ plans and strategies, it is how to keep clients as a multi-trillion wealth transfer goes ahead. To grapple with this topic are Susan R Schoenfeld and Carol R Kaufman – both are well-known to many readers in the Family Wealth Report community. (More on the writers below.) The editors are pleased to share these insights and invite replies and feedback. The usual editorial disclaimers apply. Email

The largest generational wealth transfer in US history has already begun. Between now and 2045, a total of $84.4 trillion in wealth is expected to pass to beneficiaries or charities in the US, according to a report from Cerulli Associates, a Boston research and analytics firm. Most of the money (63 per cent) will come from Baby Boomers. (1)

Almost 10,000 Boomers (born 1946 to 1964) turn 65 every day, and about half the country’s wealth (over $75 trillion) is in their hands. The Cerulli report expects a gradual shift in demographics, finances and responsibilities to Generation X and Millennials (born 1981 to 1996). Gen X will inherit the most at $29.6 trillion; Millennials are next with $27.4 trillion, followed by Gen Y ($11.5 trillion). (2)

Most research shows that fewer than 20 per cent of adult children of affluent clients will remain with their parents’ financial advisor after inheriting their parents’ wealth, because they have very different expectations of how they want advisory services delivered to them. (3)

Snappy Kraken, a MarTech innovator, one of the largest marketing research companies serving financial services professionals, released a survey on February 7, 2023. In the next 18 months, 52 per cent of high net worth (HNW) retirees and pre-retirees will consider employing a new financial advisor because they aren't satisfied with their current one. (4)

Trusted advisors to HNW baby boomers, such as financial advisors, wealth managers, and estate planning attorneys, recognize that retaining the next generation of clients is critical for the long-term success of their business. The question is how to best accomplish this?

Pain points
The most important pain points for trusted advisors to consider, in retaining next-gen offspring as clients, is that they aren’t investment focused. Rather, they’re the “soft” or human aspects, which actually turn out to be the “hardest” category to navigate:

1. Communication: Trusted advisors may struggle to communicate effectively with next-gen clients, who may have different communication preferences than their parents. Millennials and Gen Z, for example, tend to prefer digital communication and may be less likely to engage with traditional communication channels such as phone calls or in-person meetings, or even email.

2. Different values and priorities: Next-gen clients may have different values and priorities than their parents. For example, they may be more interested in impact investing, or even combining their investing and philanthropy into Environmental, Social and Governance (“ESG”) investing. 

3. Tangible assets: Certainly, we see different values occurring in what physical assets next-gen family members want… or don’t want. Classic china and crystal? Generally, not! Silver? No! Perhaps an occasional family heirloom if it has special meaning to the family member. 

4. Lack of trust: Next-gen clients generally don’t have the same level of trust in their parents' advisors as their parents do and may be more skeptical of financial advisors in general. 

5. Inexperience with managing wealth: Next-gen clients often don’t have experience of managing significant wealth. They may not have all the information needed so they can be properly advised, and possibly don’t even know what that missing information might be.

6. Competition from other firms: Trusted advisors may face competition from other firms that are actively seeking to attract next-gen clients. 

7. Demographics: The future of wealth is women.  According to Oliver Wyman, women represent more than 40 per cent of HNW individuals globally. This is expected to grow strongly over the next decade, as Baby Boomer men die and pass on control of their wealth, first to their spouses and then to their children. This will be one of the biggest and most important relationship growth opportunities in the next decade. (5)

8. Aging of advisors. The average age of trusted advisors is 55. Many are already thinking about retirement and yet don’t have a multi-generational, client-facing team. (6).

By understanding these pain points and developing strategies to address them, advisors can build strong relationships with the younger generations of clients, securing the long-term success of their business.

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