The Future Proof conference session moderated by this correspondent in Miami Beach began with controversy.
The session was titled The Great Wealth Transfer: Strategies for Multigenerational Planning. But just a few days before the conference, Josh Brown, the CEO of Ritholtz Wealth Management, posted on LinkedIn that the “‘Great Wealth Transfer’ is porn for financial advisors.”
Brown, whose firm is a business partner of Future Proof, argued that “wealthy Boomers aren’t selling their stocks, they’re borrowing against them to buy second homes and condos. They’re living longer than their parents. By the time they’re leaving assets to their Millennial children, those children will be in their 50s.”
On stage , we noted that Boomers do indeed hold a great deal of wealth. Nearly three-quarters of wealth in the US is held by people over 55, and Cerulli Research estimates that slightly over $100 trillion will be transferred over the next 20 years. Millennials are estimated to receive about $46 trillion, Gen X $44 trillion and Gen Z $15 trillion.
But, to Brown’s point, how much is being transferred?
Family Wealth Report surveyed professional Millennials in their 30s and found that four in 10 said they had received an inheritance or a wealth transfer that had an impact on their lives. While not overwhelming, 40 per cent is not insubstantial either, or, of course, the transfer of wealth will increase in the years ahead.
So, what are some actionable strategies for multigenerational planning; best practices for engaging NextGen clients and how can advisors best meet their unique needs?
Identifying and bridging the generation gap
Willow Creek Wealth Management in northern California told FWR that the firm reviews its client roster annually to identify “if it makes sense for us to have a more focused engagement with their children, and, if so, do we already?” said firm president and CEO Timothy Admire.
That engagement may mean including the children in some meetings or establishing a parallel relationship with the children to provide some basic financial planning services, and making the firm available as needed.
“The whole idea is to build trust and connection with the children so that when their parents pass, it’s a logical and seamless transition within Willow Creek and looking elsewhere is not on their minds,” Admire said. “The next evolution of this for us will be to further systematize this and move the data into our CRM so that we can see globally which clients’ children require this level of engagement and see if we are actually achieving that.”
Estate planning is one of the most powerful tools advisors have for creating meaningful, long-term connections across generations, according to session panelist Kathy Wunderli, head of private wealth at Wealth.com.
Left to right: Charles Paikert, Shruti Joshi, Facet president; Kathy Wunderli, head of private wealth, Wealth.com
“Although clients can be reluctant to involve adult children in planning, advisors should encourage clients to involve their adult children early,” Wunderli said. “The rewards of this family communication are more than just financial. This builds trust and financial literacy and often leads to stronger retention across generations.”
When it comes to engaging Millennials and Gen Z, advisors have an uphill battle.
The FWR survey, as mentioned above, showed that only one in 10 Millennials worked with an RIA at all. Respondents said they were most interested in ease of accessing information and navigating websites and apps, expertise and low fees.
Providing “on-demand, easily accessible advice is crucial,” according to session panelist Shruti Joshi, president and COO of Facet, a virtual RIA that targets NextGen clients. Leveraging text messaging and scheduling virtual meetings convenient for clients helps the firm achieve accessibility, Joshi said.
Younger clients prefer “concise, easily digestible ‘snack-bite’ content and often rely on a combination of authoritative figures and influencers for information,” Joshi explained. “Creating ‘edutainment’ content that is engaging and informative and distributing it across various social media channels and within communities that feature trusted voices and influencers, tends to be more effective than traditional, longer-form content formats.”
Two traditional RIAs agreed. Offering younger clients and prospects “as much video as possible” on YouTube and Instagram and 90-second reels on Facebook, LinkedIn and BombBomb resulted in high response rates, said Lauren Oschman, CEO for Nashville, Tennessee-based Vestia.
In Columbus, Ohio, Boyer Financial Group also found that using video, music and art “to make personal finance relatable, entertaining and ultimately educational” appealed to Millennial and Gen Z prospects and clients.
Thanks to the availability of free digital editing tools, advisory firms don’t need to pay for special marketing programs or use ‘finfluencers’ to reach younger prospects, said Drew Boyer, president of the firm.
Unique needs
As for the unique needs of NextGen clients, the FWR survey found that professional Millennials in their 30s were most concerned about having enough money to buy a house, educate their children, travel and retire comfortably.
Vestia focuses on a niche market of female physicians, who are concerned about cash flow planning because of the rising cost of housing and childcare, Oschman said. Boyer said his younger clients worry about the cost of housing and repaying student loan debts.
This cohort is attracted to risk in the form of buying cryptocurrency and trading stocks on Robinhood, he added. As a result, one of the firms’ biggest challenges with NextGen clients is helping them “set realistic expectations” Boyer said.
NextGen clients are navigating a different world shaped by “economic uncertainty, shifting social norms, and a redefinition of wealth itself,” noted Wealth.com’s Wunderli. “They want holistic guidance that reflects their reality – not just investment performance, but also social impact, family planning, and mental wellbeing.”
Advisors looking to effectively serve NextGen clients need to be “adaptable, technologically savvy, transparent, and focused on providing holistic, value-driven advice that addresses their unique needs and busy lifestyles,” Joshi said. “Building trust and empowering these generations to use their money as a tool to achieve their life goals will be key to long-term success.”