February 21, 2024



To sustain a multi-generational family business, advisors need to provide comprehensive and thoughtful estate planning, Be prepared for your client’s heirs to remain loyal.

However, many wealth managers lack comprehensive wealth transfer strategies for these clients, according to new research from Financial Planning parent company Aricent.

Arison’s report this week, “Attract the next wave of customers” surveyed 394 wealth management professionals at firms large and small across the industry (from brokerages to registered A Framework for Successful Transformation “Assets to Heirs.”

This means that more than four in 10 respondents do not provide a system plan for the ultimate location of client assets, despite the continued wave of Cerulli Associates Forecasts $84 Trillion will continue until 2045. The gap between Largest firms (each with $1 billion or more in assets under management) and smallest firms (under $100 million in assets under management). More than two-thirds, or 68 percent, of the largest firms have a wealth transfer strategy, but only 42 percent of the smallest firms have one.

“Many advisors are used to serving an older client base and worry Relevant to Young Consumers,” the report said, adding that most advisers have clients who are over the age of 45 and tend to be “in the 60+ age bracket.”

However, “old customers eventually pass away and need to be replaced with other customers for the business to continue,” the report said. Hiring young talent who can resonate with these heirs can help with issues like this. It also secures the future of the consultants’ own business – as young talent can be groomed to take over the business when the current owner retires.

read more: 5 takeaways from Arizent’s research on the Great Wealth Transfer

all the bells and whistles
So, what does a successful wealth transfer program look like? Arizent has identified several core areas of service that consultants offering such programs tend to have. These include “estate planning, tax strategies… Financial Literacy Educationfacilitation of family meetings, values-based estate planning and successor management skills,” the report said.

Companies with such plans often also increase their social media presence to better connect with younger prospects — but the majority of respondents overall said they did not. “Social media is a place where many younger generations can be reached and, more importantly, educated on the need for sound financial advice,” the report said.

Specifically, family meeting assistance is an important service that can have many components. Advisers can host “whole family” events once or twice a year, encouraging clients to invite young children in the family to “relevant client meetings” and offering discounted fees for clients’ children or grandchildren, the report said.

More importantly, the counselor needs to adapt to being a trusted outsider leading and even mediating difficult family conversations at these meetings.

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

the heart of the matter
When it comes to wealth transfer planning, “overcoming the more emotional aspects of planning remains the key to success,” said Chayce Horton, a research analyst with Cerulli Associates’ wealth management team.

The best way for high-net-worth families to have these conversations is through family meetings and “facilitating regular communication,” Horton said, citing Cerulli’s recent research on high-net-worth estate planning practices.

“Almost all households, especially those with substantial wealth, Try to maintain an active conversation about the future Horton said. “That’s why we found that successful wealth planners spend a lot of time holding frequent, organized meetings and gatherings in dispersed, multigenerational families.”

To ease access to such meetings, counselors can help families develop a shared family mission statement, or guide them in activities such as “inclusive philanthropic planning,” which helps family members “gather and codify values ​​and a sense of purpose,” Horton said.

Amy Castoro, President and CEO of Williams Group, a high-net-worth estate planning firm In San ClementeIn California, if advisors are successful in getting families to think through and communicate proactively about their wealth transfer plans, it also has major benefits for society—it reduces the chances of heirs fighting over wills after the fact, which can waste wealth capital in family courts. Can be used for more productive purposes.

“The more families we can get to talk about their wealth, the better their relationships will be,” Castoro said.

“We’ve learned that when families come together, their philanthropy can change the world.”