There’s nothing like using the word “great” in a phrase to get people to sit up and take notice, especially in our industry. The Great Depression, the Great Prosperity, and the Great Recession all identified periods in our history with significant economic impacts.

Now, the Great Wealth Transfer is coming. Or, considering that the oldest baby boomers are nearly 80 and the oldest Gen Xers turn 60 this year, it’s no doubt already here. So, what does that mean for you? Two crucial statistics stand out: 1) It’s estimated that $124 trillion will change hands by 2048¹ and 2) More than 80 percent of heirs fire their parents’ advisors after inheritance². This could present a serious risk—but also a “great” opportunity—for the future of your advisory business.

When the Money Changes Hands

Why is it that so many heirs choose not to retain their parents’ advisors? If you haven’t built a relationship with your clients’ children and included them in planning meetings, they may:

• Lack faith in your ability to manage their money or properly guide them
• Feel you don’t share their same values, communication style, or life stage concerns
• Believe they can do it on their own or want to work with someone younger

Overcoming these obstacles may pose a challenge, but there’s one thing you can do to have the best chance to succeed: start early.

Building Relationships Takes Time

The relationships you’ve built with your clients didn’t happen overnight. It’s no doubt taken time and effort for you to become their trusted advisor. The same rings true with their children. When inheriting money, it’s unlikely they’ll delegate managing it to someone they don’t know.

The first step, and one you should consider a priority, is to promote the family meeting. By starting early (now for your Gen X clients!), it gives you time to build trust before any money changes hands. You can also serve as the liaison to create a dialog among family members. Talking about finances can be a touchy subject. It’s not something that happens in everyday conversation, and waiting too long could create friction when it comes to inheritance.

Remember, you’re more than just a money manager. By working through estate planning concerns with everyone involved to help with matters such as governance and hard assets (e.g., jewelry, artwork, and heirlooms), you’ll show your value-add by setting yourself up as an professional they can rely on when things get complex.

Meeting Them Where They’re At

When working with the next generation, keep in mind that, in many ways, they’re very different from their parents. This includes:

• Planning needs: They’re more focused on paying down debt, home buying, and childcare than they are about retirement planning.
• Outlook on investments: Many will be much more focused on thematic investing and sustainability.
• Portfolio construction: They may want cryptocurrency and alternative investments as part of their asset allocation mix.

Be sure you understand their planning goals and values, and adapt accordingly. You may also need to tailor your communication style, as they are likely vastly different from their parents. While many baby boomers and Gen X clients prefer face-to-face meetings and communication via email, the younger generation is all about convenience. Remote meetings, contact via texting, and even access to apps will give you a leg up.

The Benefits of Hiring a Next-Gen Advisor

If meeting younger clients where they are concerns you, there’s a solution that can also be a boon to your business: hiring a next-gen advisor. Consider the advantages:

• They can relate better: Their communication style and technical proficiency are more aligned with those younger clients.
• It helps you solidify your legacy. Including a younger advisor in your succession plan will ensure that someone can take the reins and serve those next-gen clients when you’re ready to step back.
• It may lead to new business: Advisors who don’t plan ahead for the Great Wealth Transfer may lose accounts when money changes hands. With a next-gen advisor on your team, it presents a great opportunity to attract those clients.

Start the Conversation Today

If you haven’t broached the subject of long-term planning with your Gen X clients, now’s a good time start. To begin, assess their current situation with this retirement inventory checklist. That can lead to your next discussion: the family meeting. Remember, the sooner you engage with your clients’ children, the more time you’ll have to build their trust and show the true value you can offer. It will go a long way to ensure that they will rely on you (and the next-gen advisor you just hired!) to help manage their financial life when the time comes.

Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.

Please consult your member firm’s compliance policies and obtain prior approval for any ideas discussed in this article before moving forward.  

¹The Cerulli Report—U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2024, December 2024
²The Cerulli Edge—U.S. Retail Investor, November 2023