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Five-Steps to Continue Generational Wealth

Five-Steps to Continue Generational Wealth

When it comes to managing generational wealth, your advisory practice is probably the last place your clients’ children would consider for managing the money they inherit from their parents.  It may be tough to hear, but it’s true. A newer generation of investors is gravitating toward platforms like Robinhood or one of the many available robo-advisor services.

Don’t believe it? That’s not a surprise since most financial advisors think they will retain those assets when their clients pass (93% by one survey)—a mistaken presumption since 85% of inheritors said they will move the assets away.1

The reasons may be tied to generational differences and a desire for leading-edge technology, but some of the fault, as Shakespeare said, “lies not in the stars, but in ourselves.”

The unfortunate truth is that advisors have made little effort to connect with their clients’ children. According to one survey, only 22% report even having met their parents’ financial advisor and only 3% meet regularly with the advisor.2

This matters to investment professionals since building this bridge to the next generation is the most important step in retaining the value of the business an advisor may want to sell upon retirement or hand over to his or her children, continuing generational wealth.

Start Connecting Today

There are five important initiatives advisors can begin in 2021 to create and strengthen their relationship with the inheritors of their clients’ assets.

  1. Get the children involved, starting today. At your next client review, discuss with your clients the idea of inviting adult children to their next meeting, emphasizing the value of their children’s financial education and familiarity with the parents’ estate planning goals.
  2. Beef up your online and social media presence. This is the communication medium of a new generation, so start getting serious about producing regular and relevant content on blogs, podcasts and videos.
  3. Build a relevant service offering. Offer services that matter to younger investors, like college debt planning, basic financial planning, monthly investment services and a 401(k) investment review.
  4. Create relevant content. Produce content that will attract their interest, like “Three Biggest Mistakes Robinhood Investors Make”; “Five Questions to Ask a Robo-advisor Service”; “The Next Big Clean Energy Isn’t Solar”; or “How to Save for a House.”
  5. Build ties with the children. Advisors can do this any number of ways, such as hosting planning events, or sponsoring a yoga night or organic food booth. Have a beer-tasting event, do a video seminar on social responsible investing or undertake some community initiative. Be creative!

To learn more, read our white paper on connecting with Millennials.



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