December 2, 2023

Winning young heirs as clients is key to the growth of many wealth managers, but few see it as a real priority.

A new report from Arizent, the parent company of Financial Planning, explains how advisors are catching up with peers who have gone further in attracting the next generation of wealthy clients.industry research firm Cerulli Associates Forecasts $72.6 Trillion in Assets In the so-called “Great Wealth Transfer,” that wealth will pass to heirs by 2045, on top of the $11.9 trillion spent on philanthropy.

read more: To win big wealth transfers, financial advisors must be willing to reject old narratives

Arizent’s report, “Capture the next wave of customers”, posted on June 19th, sponsored by Nuveen, Survey results previewed with Arizent at INVEST 2023 in FP Meeting.

Wealth management professionals surveyed agree that client acquisition is a key growth driver, but only 35% see younger investors as a “key priority” or a “high but not key priority” — second only to High net worth clients with investable assets of at least $1 million but less than $30 million, and ultra high net worth clients with at least $30 million, as well as business owners and retirement plans such as 401(k).

However, Chayce Horton, research analyst at Cerulli Wealth Management, said the massive wealth transfer “is already accelerating”.

“The intergenerational wealth transfer of wealthy households is (projected) to double from $700 billion a year in 2023 to $1.4 trillion a year in 2033,” Houghton said.

read more: Rich investors do a terrible job of telling heirs what they’ll get: report

Single-mindedly chasing older ultra-high-net-worth investors could mean missing out on where their money is really going as they pass it down — and that could happen quickly.

Conducted online in April 2023, the Arizent study surveyed 394 respondents, most of whom held senior positions at firms such as wire companies, national broker-dealers and registered investment advisors. 35% of firms manage $1 billion or more in assets, 38% have AUM between $100 million and $999.9 million, and 27% have AUM of less than $100 million.

Scroll down to see key takeaways from the study. The full report can be found here.

read more: Exclusive Study: Attracting the Next Wave of Customers