Updated March 21 2024, at 9:50 AM
The Great Wealth Transfer is underway.
This means opportunity for financial professionals…or missed opportunity for those who aren’t proactive now.
By 2045, an estimated $84 trillion will be changing hands, but that’s not the only number financial professionals should be concerned with. Up to 80% of heirs are predicted to fire their parents’ or grandparents’ financial professionals.
The next generation won’t stick with their family financial professional just for legacy sake, especially when connecting with a new professional can be done seamlessly online. So, if financial professionals don’t engage with their clients’ heirs before the assets are transferred, they may lose them altogether.
This means good news for some: high-net-worth (HNW) clients are up for grabs. Those that pivot their strategies to reach this tech-savvy, entrepreneurial generation can expect impressive business growth.
So how can you seize this opportunity to reach the next generation of wealth-holders?
Here are seven steps to get you started.
1. Connect with Clients’ Families
You know what they say: the early bird gets the worm. But in this case, the early bird keeps the worm because professionals who involve their clients’ heirs in the planning process early on are more likely to retain those clients in the future.
Baby boomers and Gen X were raised in a society that considered money talk a “taboo,” so it isn’t uncommon for their adult children to be left in the dark regarding their inheritance. That’s why it’s important to initiate conversations that encourage wealth transparency.
Ask your clients if you can facilitate a family discussion to cover:
- Inheritance specifics: How much? And what do the heirs intend to do with the assets?
- Dreams and aspirations: Do the heirs aspire to start a business? Own another home?
- Philanthropic passions: Are they the same or different from that of their parents?
- Education: What are their children’s or grandchildren’s educational goals?
- Legacy: What are the parents’ wishes in how the money is used, invested, and preserved?
Creating proactive plans to preserve generational wealth establishes trust with your client’s family.
2. Maximize Referral Opportunities
As you connect with your clients’ adult children, ask for referrals. Chances are, they know friends or colleagues in similar situations who need financial guidance.
Foster connections through family events. These can be paint-along parties, cooking classes, or sporting events that leave a lasting positive impression on HNW clients and the prospects they invite. Host educational experiences through workshops, webinars, or seminars specifically designed to address the financial challenges and opportunities that prospective HNW clients face.
Whether you’re establishing connections or credibility, these initiatives will cement you as a preferred financial professional in prospects’ minds.
Related: 4 Tips for Getting More Referrals at Your Social Events
3. Embrace Technology
Gauthier Vincent the lead wealth management partner at Deloitte Consulting, predicts: “If firms are slow to embrace the digital transformation of the business, more people will change advisors.”
Let’s face it: paper applications and outdated processes aren’t going to impress a younger demographic. Implement technology wherever possible, and consider a wealth management platform that can offer:
- E-applications
- Risk tolerance
- Product training
- Lifecycle and business tracking
- Data analytics
Related: 5 Reasons to Use a Wealth Management Fintech Platform
4. Update your Marketing Strategies
When it comes to your business reputation, you can bet that millennials are doing their homework. The client experience starts—and potentially ends—with your website and social presence.
Take a critical look at your website: Is it user-friendly? Is it modern? Younger demographics value public opinion when making decisions, so consider adding testimonials to your website to establish credibility.
Re-vamp your LinkedIn account: What do your profile photo and bio say about you? HNW millennials are looking for authenticity, so being professional is just as important as being approachable. Establish yourself as a thought leader by posting frequently, focusing on topics relevant to the HNW clients you want to attract.
5. Tailor Traditional Wealth Management Styles
The way the next-gen makes, spends, and saves money is inherently different from those before it.
While Baby boomers and Gen X traditionally focused on saving money for the long term, millennials emphasize the short term: lifestyle, experiences, and investing.
To the next-gen, “success” isn’t staying in the same job, house, or career forever; instead, their wealth-planning approach gears towards entrepreneurial efforts. Rather than focusing on preserving their inheritance, they’re more willing to take risks with that money to yield their own wealth.
Understanding younger generations’ trends, habits, and values can cue you on what approach to take and where financial guidance is needed most.
6. Stay Informed
Let’s be honest; when you experience pain or illness, you probably Google your symptoms before meeting with your doctor. And if your doctor’s diagnosis doesn’t match what you found on WebMD, you might even protest because the Internet made you feel like an expert.
The wealth management landscape is the same way. Previous generations relied on financial professionals to provide information about investments, insurance, and strategies, but millennials won’t approach you with a question they haven’t already researched.
For professionals, this means staying on top of industry news, product analysis, and market research. What risks do these upcoming HNW individuals face in retirement? What misconceptions exist? Know what solutions are available so that you can proactively answer clients’ questions.
7. Present Advanced Strategies
Even if HNW clients aren’t part of your current repertoire, dress for success. That means equipping yourself with the information, resources, and expertise you need to help your business attain that level.
Whether you’re helping HNW clients fulfill their philanthropic desires or business owners initiate succession planning, clients with significant assets don’t want run-of-the-mill solutions; they want personalized strategies they can’t find elsewhere.
Good news! You don’t have to be an expert in advanced strategies to serve HNW clients.
All you need is access to a team that can empower you with the expertise to have the conversations. FIG has a dedicated team ready to help you present personalized advanced solutions to clients.
Related: How to Attract High Net Worth Clients for Wealth Management
Ready to Level Up?
The Great Wealth Transfer is here, and those financial professionals who understand its significance and invest time into adapting, educating, and building relationships will come out on the other side as a powerhouse.
We empower financial professionals with the coaching, presentation materials, and innovative solutions they need to advance their business to the next level.
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