Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
As the great wealth transfer gets underway, both older and younger generations are going to need extensive financial guidance. Advisors should be thinking about this shift in wealth over the next 10-20 years in two distinct ways: how they can help their older clients effectively transfer their wealth to heirs, and how they can establish relationships with the next generation’s recipients of those assets. Those next-gen investors, if not engaged now, may not stick around to work with their parents’ financial advisor once the assets are in their hands.
While baby boomers can be slower to embrace technology, younger investors tend to seek out and prefer tech-focused services and providers. This preference for technology is something advisors should lean into to connect with younger generations of investors, especially those heirs – the children and grandchildren of their existing clients.
Here are three ways advisors can leverage technology to target next-gen prospects:
1. Create an easy process for clients to make referrals.
As clients get older, referral rates decline for a few reasons. They may have already made appropriate referrals, they may meet fewer new people, or their friends and peers may already have established financial advisor relationships. Younger generations of clients can be a valuable source of referrals.
To make it easier to connect with the next generations of clients – the children and grandchildren of existing clients – advisors can set up family meetings. Using their CRM system, advisors can create and send an email to existing clients that is easily shareable with family members for family planning meetings. Plus, the email can include links to complete information ahead of the meeting so that advisors can understand goals and circumstances ahead of the conversation.
2. Establish a digital presence that appeals to next-gen investors.
Next-generation clients have different priorities and concerns than their parents and older investors. They also have different preferences when it comes to engaging with a financial advisor. Some things to consider are:
- Thinking digitally and collaboratively. This is how most next-gen clients want to work with trusted advisors;
- Refining your messaging to speak directly to next-gen client needs and prospects;
- Highlighting your use of technology tools, such as client portals and planning software; and
- Creating a social media presence that’s authentic and relatable.
Younger clients use social media to engage with financial advisors1
Responses indicate which social media channels investors would use to interact with a financial advisor, if it were available.
Younger clients are searching online for a financial advisor1
Responses indicate how clients found their current financial advisor.
3. Leverage estate planning technology to uncover opportunities and maximize value for clients.2
Estate planning technology has evolved beyond providing a simple blueprint. Today’s estate planning applications includes full integrations with generative AI to read and visualize estate planning and tax documents, giving projections, future scenarios, and insight into where opportunities exist.
Snapshot of estate planning dashboard from FP Alpha
Advisors can use technology to engage with next-gen investors who are on the receiving end of the great wealth transfer – and for good reason. Cogent research shows that of those expected to inherit assets over the next decade, more than one-third anticipate receiving at least $500,000. And of those with knowledge of their inheritance, over half plan to invest those assets.
At my firm, Altfest Personal Wealth Management, we use FP Alpha, a wealthtech firm I founded in 2020. It allows us to offer estate planning to our entire client base, not just the UHNW clients. The tool is AI-assisted, which allows it to automate manual tasks like ready wills, trusts and health care directives. That saves us time and resources, and the robust output lets us plan more effectively for our clients’ futures.The output from the deliverable provides recommendations and areas to highlight to the clients’ attorney, allowing us to be the “air traffic controller” and truly provide comprehensive planning.
With all of the amazing tech tools available to us advisors, I encourage you to embrace what they can assist you with in order to more effectively help clients navigate their planning and especially to build meaningful connections with the next generation of investors.
Endnotes
1 Source: Absolute Engagement, Building a Bridge to the Next Generation webinar, June 2024
2 Source: FP Alpha
3 Source: Cogent Syndicated, Trajectory of Intergenerational Wealth Transfer, 2024
Andrew Altfest, CFP, MBA is the president of Altfest Personal Wealth Management as well as the founder and CEO of FP Alpha.
A message from Advisor Perspectives and VettaFi: To learn more about this and other topics, check out some of our webcasts.
More Active Management Topics >
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
