Much has been made of the so-called Great Wealth Transfer, with predictions of trillions of pounds moving from the Babyboomer generation to their children in the coming years.
Many advisers are being urged to build relationships with the next generation in anticipation of this shift. But I think this is a distraction from where our efforts should be focused: looking after our current clients.
The fact is, Babyboomers hold the majority of the wealth and, therefore, most of the need for financial advice. These are the clients we’ve built long-term relationships with and the ones who require our expertise now. Shifting attention to their children, who often don’t yet need this level of service, can pull efforts away from where we add the most value.
It’s also worth questioning whether focusing on the next generation is credible, as well as advisable.
The real value lies in continuing to focus on those who need us now. Our existing clients deserve our attention
In my experience, individuals often move away from their original adviser as their financial circumstances change. Life events such as an inheritance or windfall can prompt them to seek an adviser who is more in tune with their new financial needs.
I’ve observed several clients who, after coming into wealth, felt they had outgrown their previous adviser — often because that adviser specialised in areas like mortgages or basic financial planning, rather than wealth management. These clients realised their old adviser was no longer suited to handling the complexities of their evolving financial situation.
Wasted time and energy
The narrative that advisers must secure the next generation to maintain assets under management seems shortsighted.
The time and energy spent trying to engage the children of clients often don’t pay off. Many of them believe they can handle their finances through quick Google searches or AI tools like ChatGPT, which often offer outdated or inaccurate information.
It’s not about ‘winning’ clients from one generation to the next; it’s about making sure our current clients and their families are well cared for
Some online tools may work for basic financial decisions but they rarely hold up when real-life complexities arise. As professionals, we know how to filter out what’s useful and what’s not. But the next generation may not have the expertise to make these distinctions, which means much of our effort in chasing them is wasted.
Talking with peers who are part of this demographic, many don’t even feel they need professional advice yet.
Another factor to consider is that advice is not just about knowledge — it’s about trust. Boomers have developed a strong relationship with their adviser, built on years of trust and understanding. Their children, however, may not yet have that trust or relationship with us. Forcing those connections may feel transactional and a forced relationship can fall flat.
We should aim to help the people we know we can genuinely assist, rather than try to build quick, shallow relationships for the sake of a potential future.
Engaging with spouses
Where I do not disagree is about engaging all members of the current generation, particularly spouses, who, it is reported, are often overlooked in the advice process.
Spouses, especially women, are increasingly becoming the key financial decision maker in a family.
The time and energy spent trying to engage the children of clients often don’t pay off
In many cases, they may find themselves in control of family finances after the death of a partner. Yet many women feel disengaged from or underserved by the financial services industry.
A large percentage of women switch adviser within a year of their husband’s death, not because of a lack of interest but due to the industry historically catering to men, leaving many women feeling marginalised.
This is where our focus must shift — ensuring both partners are equally engaged in financial planning, not as a client acquisition tactic but because it’s simply the right thing to do.
Continuity of service is crucial. I have several widows as clients and I’ve seen how, when a partner dies, they can feel overwhelmed by the responsibility. This has never been a radical realisation for me, though. We have an ethical duty to make sure they’re prepared and supported during this difficult transition.
The fact is, Babyboomers hold the majority of the wealth and, therefore, most of the need for financial advice
For most relationships (second marriages can be a notable exception), the base position is usually that wealth is joint. So it’s not about ‘winning’ clients from one generation to the next; it’s about making sure our current clients and their families are well cared for.
In the end, while it may seem prudent to fixate on building relationships with the next generation, the real value lies in continuing to focus on those who need us now.
Our clients deserve our attention, and chasing the next generation may ultimately be a costly distraction from this core objective.
Alistair Cunningham is financial planning director at Wingate Financial Planning
This article featured in the November 2024 edition of Money Marketing.
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