How $30 Trillion Wealth Transfer Impacts Financial Advisors

 In Marketing Solutions

Financial advisors, listen up. The greatest intergenerational wealth transfer in American history has already begun — but many financial advisors might lose their biggest clients. Younger generations will inherit one trillion dollars in wealth annually for the next 30 years (according to finance industry experts). However, most of those kids say they aren’t interested in retaining their parents’ financial advisors. Millennials are instead searching for new financial advisors amongst their peers or exploring other money management services (such as robo-advisors). Losing clients during this wealth transfer could be a huge problem for financial advisors who’ve spent years fostering lucrative relationships. Now’s the time for savvy financial investors to take the first step toward mitigating these risks by acquiring new clientele.

What Financial Advisors Can Do Now to Secure and Retain Clients

While there’s no bulletproof trick for retaining clients during a multigenerational wealth transfer, financial advisors can implement these three strategies:

1. Build Multigenerational Client Bonds

According to a 2016 MFS Investing Sentiment Insights survey, 51% of children have never met their parents’ financial advisors. So, how can financial advisors build stronger multigenerational bonds with their clients’ children before the family’s own wealth transfer happens? By encouraging clients to:

  • Include their children in family conversations about money, budgeting, and their financial needs
  • Bring kids in for meetings with their parents’ financial advisors, when they feel comfortable doing so
  • Initiate discussions about their own personal finances, even as young as teenagers.

They can start with relevant financial issues, such as buying a car, paying for college, or purchasing a first home. These early interactions make it less likely for adult children to fire financial advisors after completing the generational wealth transfer.

2. Encourage Clients Not to “Hide Family Wealth”

Many parents don’t feel comfortable revealing every aspect of their finances to their own children, even after they become adults. However, encouraging clients to discuss family wealth distribution plans can be beneficial for parents and adult children alike. In fact, 79% of 2016 MFS survey respondents said having that conversion with their financial advisors was “extremely/very helpful.” Incentive trusts, tying fund distribution to ages and events as well as other disbursement methods can make it easier for children to understand their parents’ estate-planning strategy. Early communication, education and preparation can prevent kids from squandering their inheritance and keep many financial advisors “in the family.”

3. Start Sourcing New Financial Services Clients Today

Engaging in new client acquisition is one of the most proactive ways to keep business booming during the multigenerational wealth transfer. Since 66% of children fire their parents’ financial advisors after inheriting wealth, securing new clientele can mitigate any losses. LeadingResponse delivers high-quality, 100% exclusive financial services leads that meet your firm’s unique criteria. That means we’ll never offer your leads to another firm, and you won’t have to rush to close new clients.

Use Our Lead Nurturing Services to Grow Your Business Quickly

Whether you’re looking to grow your business quickly or simply keep your pipeline full of qualified leads, LeadingResponse will deliver. In addition to delivering leads, we offer two optional add-on services that help you optimize your client acquisition process:

  • Use our completely free Lead Management System (LMS) software to track, report and optimize lead intake. Clients who opt into using our 100% secure LMS software enjoy monthly optimization support from a dedicated account manager. With customizable reporting and tracking features, clients using our LMS report higher conversion and retention rates than those who don’t.
  • Put your firm’s lead intake on autopilot with our 24/7 U.S.-based call center. This optional service is great for financial advisors who want to fast-track their lead intake process without hiring additional staff. Our call center agents boast a 70% contact rate, can perform live transfers and get initial paperwork signed for you.

Last but not least, let’s talk numbers: Our current financial services clients enjoy a 7.5% monthly conversion rate. Want to know more about what LeadingResponse can do for you? We’re happy to answer your questions.

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