Younger Heirs Walk Away from Family Advisers at Speed

Wealth management firms are stepping up efforts to retain next-generation clients as 70% of heirs say they will move on from their parents’ advisers. This shift puts trillions of dollars in inherited wealth at risk of changing hands.

For years, the wealth management industry has focused on baby boomers, who collectively hold more than $125 trillion in assets. Now, as a major generational wealth transfer begins, many younger inheritors are rejecting traditional family advisers. Often, these heirs have no relationship with the family's current adviser and are looking for services that align better with their digital habits and financial objectives.

Recent research underscores how common this trend has become. About 81% of young high-net-worth individuals plan to change advisers within two years of inheriting wealth, according to Capgemini. Cerulli, another research firm, places that number at 70%. One of the main issues is that advisers usually work only with the primary client, which is typically a parent, and often do not connect with the rest of the family until it is too late.

The challenge goes beyond financial advice. Successful advising is built on trust and relationships, not just calculations. Many firms have failed to engage the broader family, missing opportunities to build connections with heirs and spouses. This problem is made worse by the fact that many current advisers are nearing retirement, which leaves them less motivated or able to relate to younger clients who seek long-term advice and support.

Despite these challenges, some firms are evolving. New approaches include running financial education programs, launching mobile apps, and using approved messaging platforms to better engage younger investors. Some firms are even hosting networking events or setting up book clubs to create a sense of community. Others have brought in younger, more diverse advisers who better reflect the backgrounds and expectations of the next generation.

This transition is far from over. The way firms respond may shape the future of the entire industry. With trillions set to move through what many are calling the Great Wealth Transfer, those firms that modernise their offerings in both technology and talent are most likely to retain these valuable client relationships.

Source: The Australian, Dr Lami, Black Diamond Advent

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