All posts by : Kristian Borghesan

According to Cerulli Associates, wealth transferred through 2045 will total an estimated $84.4 trillion. More than $53 trillion of this amount is estimated to be transferred from households in the Baby Boomer generation, representing a whopping 63% of all wealth transfers. 

Perhaps more significant, or alarming, is that more than 70% of heirs to this wealth are likely to fire or change financial advisors after inheriting their parents’ wealth. On the high end, we’ve seen this number be quoted as high as 88%.  

This has massive implications on how firms approach all areas of their business, including technology, to engage with and attract the next generation of investors and clients. Not to mention that the majority of advisors are not prepared to engage with the next generation; some of them, not in the slightest.  

This impending challenge also presents a real opportunity for firms and advisors to demonstrate their value and cement trust across generations.  

So, given what we know about The Great Wealth Transfer, what exactly should firms be doing — or rather — what are the top-producing firms and advisors doing right now to win over this next generation of clients?  

7 Proven Strategies to Win Over the Next Generation 

Based on countless conversations with firms, advisors, industry experts and consultants, in addition to reviewing and familiarizing ourselves with surveys and reports, we’ve identified the below 7 tried-and-true strategies to engage with and improve chances of retaining the next generation as clients.  

1. (Re)Aligning Business Values, Practices, and Resources 

First and foremost, wealth management firms (wirehouses, credit unions, IBDs, RIAs, Family Offices, you name it) and financial advisors absolutely must to take a step back to realign their business values and ensure that they meet the values and goals of this next generation. 

There are four critical areas that your firm should be evaluating and re-evaluating on an ongoing basis.

1. ➜ Business Processes 
2. ➜ Communication Channels 
3. ➜ Engagement and Service Models 
4. ➜ Human Resources 

Of these four areas, what we’ve found is often very overlooked is human resource allocation. 

The question to ask yourselves internally is, “Do we have the right staff and advisors to effectively engage with the next generation?”.  

Recently, our team met with a mid-sized RIA, who openly acknowledged that their firm felt they were unequipped to adequately engage with the next generation. As a result, they ended up hiring two young, up-and-coming associate advisors who had much more in common with their younger clients and soon-to-be clients. These next gen advisors are now responsible for much of the wealth transfer conversations wherever and whenever the next gen is involved and for any young prospective clients that are interested in working with the firm.  

While there may be several examples like the above taking place across the industry, it really still is a topic that needs to be talked about.  

In fact, one of the key takeaways from FinancialPlanning.com’s recent research on Wealth Transfer Strategies, highlights the importance of a “fresh face”, stating that firms need to hire young advisors who can appeal to younger clients.  
 
According to the study, only 13% of smaller firms are deploying this strategy, versus 50% of the larger firms. One advisor (from an RIA) referenced in the report said that “not having enough young advisors” had prevented their firm from attracting and serving more young clients. 

2. Intergenerational Continuity Planning 

An intergenerational continuity plan is a comprehensive financial plan outlining how a family’s wealth will be managed and transferred to soon-to-be heirs and future generations. 

This plan provides a detailed roadmap for managing and transferring wealth that aligns with the family’s goals and objectives. 

Creating and maintaining an intergenerational continuity plan not only helps to retain assets, but importantly facilitates the transfer of knowledge, expertise, and critical information to family members, and in doing so, to Advisors as well.  

It’s really the information, data, and documentation that is foundational to everything and paves the way for pieces of the plan to come together.   

This is exactly why having a structured information management plan (and a digital vault, notably) in place and providing family members with access to this information is one of the biggest components of any continuity and succession plan.  

Below are the 5 key “steps” or components of an Intergenerational Continuity Plan:

1. ➜ Understand clients’ goals and objectives 

2. ➜ Involve key family members (and Trusted Advisors) 

3. ➜ Develop the intergenerational plan 

4. ➜ Educate clients and the next generation 

5. ➜ Monitor, review, and adjust the plan 

3. Hosting Multi-Generational Family Meetings 

Family Meetings are a tried-and-true approach that plays an incredibly important role in helping advisors create an intergenerational continuity plan while making sure that the plan is maintained.  

Family Meetings, when done right, should encourage necessary family members to participate in discussing critical areas such as goals and values, transfer strategies, legacy and estate discussions, family assets and wealth, and more. 

The benefits you gain from hosting family meetings speak for themselves:

• ➜ Retention of relationships and assets;  
• ➜ A better understanding of family dynamics and information;  
• ➜ Building generational trust;  
• ➜ Increasing the value of your practice and preparation for your own succession planning as an advisor  

Advisors in financial services and wealth management have a unique opportunity to foster meaningful family discussions and ensure smooth wealth transitions by following the below 6-step “blueprint” to hosting Family Meetings:

1. ➜ Preparation 

2. ➜ Creating a safe environment for the family 

3. ➜ Establishing the family’s goals and their values 

4. ➜ Educate and empower clients and the next generation 

5. ➜ Develop the Wealth Transfer Plan 

6. ➜ Ongoing documentation and review  

As you’ll see, Intergenerational Continuity Planning and Family Meetings have a lot of overlap. To maximize your output and return, these two should be carried out in tandem as part of the overall strategy.  

An important consideration and takeaway: Your role as the Advisor in these Family Meetings is not to hijack them or focus on your agenda — you are acting as the family’s Trusted Facilitator. It is your job to facilitate the conversation, to make everyone feel comfortable, and to encourage dialogue and participation from family members that will ultimately serve to help everyone in the family better understand the dynamics that will lead to a successful wealth transfer. 

Yes, Family Meetings can be a lot of work. But the reward is invaluable.  

4. Engage with the Spouse 

Do you or does your firm have any sort of relationship with your clients’ spouses at all?  

Unfortunately, the majority would answer no to this question.  

The spouse is frequently overlooked and often excluded from the overall financial picture and relationship with the family’s financial advisor. This oversight can be detrimental to the overall well-being of the family’s financial situation — and for several reasons. One of the most critical reasons is that neglecting the spouse’s involvement can result in an incomplete understanding of the family’s financial dynamics and overall goals, leading to incomplete and less-than-ideal planning.  

Including the spouse in things such as quarterly or annual meetings and plan, reviews is key for firms and advisors to build trust and maintain long-term relationships with the family. By recognizing the spouse’s role and actively engaging them in the financial planning process, advisors demonstrate a commitment to the family unit, fostering a sense of inclusivity and collaboration. This approach not only helps ensure that all stakeholders are heard and understood but also provides a comprehensive view of the family’s financial objectives, enabling advisors to tailor their strategies more effectively.  

When in doubt, look for opportunities to deepen relationships and establish trust. What we’ve seen is that client appreciation events can make for a great way to encourage participation and meet additional family members. Hint: make these events about your clients, not your firm.  

5. Engage with and Educate Clients (and the Next Generation) 

Fact: Lack of communication and engagement is the number one reason clients leave their Wealth Advisors. 

Basic financial literacy and education build trust, lead to financial wellness, and importantly, go the extra distance with the next-gen. 

But it’s not just any type of communication and ”education” that clients crave and seek, it needs to be tailored. It needs to be specific and personalized. And it needs to be relevant to them, to their current and future lifestyle.  

When it comes to the top advisors and top firms, they’re active — they’re using digital channels to communicate several times a month with their clients and with their prospects.  

A really important takeaway here is to think about how your firm is currently communicating with clients and to ask if there is an opportunity for more or rather, better, education that will help clients understand certain topics and then essentially bring them back to you. 

When you’re discussing this internally, approach it with a general framework of the ‘3 C’s’: 

1. Content that you’re delivering 

2. Channels that you’re communicating on (email, social, text); and  

3. Cadence — how frequent is this communication and does it reflect or align with your client’s goals 

If you’re looking for support and technology to empower your comms and marketing engagement, there are lots of partners available to help. Fresh Finance provides a robust library of affordable educational content for events and ongoing communications, and ReachStack provides an easy way to deliver the right content to the right person at the right time. 

These programs deliver real impact for existing clients and importantly, for the next generation. Here’s a recent article showing the impact these programs can have for Wealth Management firms. 

6. Deliver Tax-Efficient Solutions 

Households are expected to transfer ~$85 trillion to their heirs and charities by 2045.  

As a result of the massive amounts of wealth transferring and being passed down generations, tax efficiency is becoming increasingly important given most of the wealth is held by older, high-net-worth (HNW) investors and will likely be subject to more expansive taxes in the coming decade. 

Firms that can remain on the cutting edge of complex planning and wealth structuring solutions will be invaluable to clients as taxation becomes a more pressing worry. And here’s what this looks like:  

• ➜ Minimizing tax liability: High net-worth families often have a substantial amount of assets and wealth, and without careful planning, a large amount of their wealth could very easily be eroded by taxes. When you’re focused on tax efficiency, you can help families mitigate their tax liability and preserve more of their wealth for future generations. 
   
• ➜ Maximizing wealth transfer: Effective tax planning enables high-net-worth families to transfer their wealth to heirs and beneficiaries in the most efficient manner. This one really boils down to beneficiaries receiving the maximum benefit.  
   
• ➜ Preserving family legacy: Wealth transfers involve passing on financial assets AND family legacies, values, and aspirations. By implementing tax-efficient strategies, you can help protect and preserve the family’s legacy for future generations, ensuring their goals and values are upheld. 
   
• ➜ Enhancing financial security: Really what we’re talking about here is mapping out strategies to reduce tax burdens — meaning families can allocate more resources towards investments, trusts, and other financial vehicles that can generate income and support the long-term financial well-being of the family. 
   
• ➜ Mitigating disputes and conflicts: Estate planning and wealth transfers can sometimes lead to conflicts and disputes among family members. By incorporating tax efficiency into the overall planning process, advisors can help minimize potential disagreements and disputes that may arise due to unequal tax burdens or inefficient transfer structures. 
   
   
• ➜ Complying with legal and regulatory requirements: Tax laws and regulations are complex and subject to frequent changes. Advisors who prioritize tax efficiency stay updated with the latest tax laws and compliance requirements, ensuring that wealth transfer strategies are aligned with legal frameworks and minimize the risk of potential penalties or legal complications. 

7. Leverage Best-of-Breed Technology 

Having the right tools and technologies in place is a game changer for everyone; the firm, advisors, your existing clients, and especially for the next generation. 

When considering best-of-breed technologies to assist with wealth transfer conversations and engaging the next generation, there are a few key things to keep in mind: 

1. Consider technologies that make it easy for the family to access and manage critical information, data, and documents. 

2. Consider platforms that offer mobile experiences (applications). This next generation isn’t just digital-first, they are mobile-first. 

3. Consider how the experience you deliver is seamlessly integrated and connected – every bit of interaction counts. 

In fact, a survey and study published by Deloitte found that 51% of financial advisors are thinking about leaving for an organization with better tech tools.  

The alarming reality is that 50% of your staff and advisors could hand in their resignation tomorrow all because they do not have access to the best technology, tools, and resources. 

Technology matters. 

To your Back Office. 

To your Advisors. 

To your clients. 

And you better believe it matters to the next generation. 

Investing in best-of-breed solutions isn’t just a “technology” investment — it’s a people, culture, and overall strategic business investment for today and for the future. 

Key Consideration: Leveraging a Digital Vault as a Major Piece to Connect the Dots  

Having everything centralized in one place is not only a huge time-saving benefit for your clients and their next-gen, but it’s also a massive value to your firm and other trusted professionals. 

A well-structured digital vault can serve as a central repository for all of the important documents and information that clients and their families need to access in the event of a change in circumstances, such as the passing of a family member, a liquidity event for the family, or the retirement of an advisor. 

We’re really seeing how a secure digital document vault serves as the single source of truth for all data, information, and documents for the family while providing a secure and efficient way to engage and connect with other family members, centers of influence, and trusted advisors (lawyers, planners, accountants, etc). 

Imagine the time and money families, your client’s family, can save during the estate settlement process with a structured and secure digital vault, where traditionally, locating critical paperwork and having access to information has been one of the most time-consuming and costly exercises, leading to massive financial burdens. 

Importantly, a digital vault goes well beyond a simple document dumping ground of a valuable tool for your clients and their family members. The right digital vault can transform back-office and administrative efficiencies with automation and straight-through processing, as well as help firms overcome books and records challenges to meet regulation, including Rule 17a4 compliance.  

Final words 

Much can be said here, but we’ll keep it simple: Start the conversation with your clients (likely the parents of the heirs to the wealth) right now and don’t overthink it.  

Are you engaging in conversations about the generational transfer of wealth with your firm, with your peers and colleagues, with partners and providers, and importantly, with your clients? 
  

If you’re not, and if you’re waiting on the sideline… then it’s too late. You need to be having these conversations in real time, all the time.  
 

Family Meetings are one of the most effective, tried-and-true approaches that can play an incredibly important role in helping advisors understand family dynamics, create an intergenerational continuity plan, and importantly, stay relevant with and for the next generation.

When done right, Family Meetings encourage all necessary family members to participate in discussing all of the critical areas that go into such a plan; goals and values, transfer strategies, legacy and estate discussions, family assets and wealth, and more.

At the end of the day, this equips the family with a better understanding of everything and everything under the sun and empowers advisors with the necessary information they need to deliver real value.

In this article, we’ll highlight and unpack the 6 critical steps to running and facilitating effective Family Meetings.

Benefits of Facilitating Multi-Generational Family Meetings

Before we jump into the six steps of hosting Family Meetings, let’s quickly cover why your firm and your advisors should be hosting them in the first place. In particular, there are four benefits and outcomes that come to mind:

• ➜ Family Meetings often result in the retention of family relationships and assets;
• ➜ Family Meetings can lead to a better understanding of family dynamics and information;
• ➜Family Meetings pave the way for building trust with the next generation;
• ➜ Family Meetings can help increase the value of an advisor’s practice and set the stage for a successful succession plan

The 6-Step Blueprint to Hosting Multi-Generational Family Meetings

Advisors have a real opportunity to foster meaningful family discussions and ensure smooth wealth transitions by following the below 6 steps as a “blueprint” to hosting Family Meetings. 

It’s worthwhile to call out and mention, however, that your role as the Advisor when hosting Family Meetings is that of a Trusted Facilitator. The best way to approach them is that they are actually not your meetings, but rather you are there to facilitate the conversation and guide the family, especially when discussing the financial and wealth side.

You’re there to make everyone feel comfortable. To help everyone understand both the basic and complex financial topics. To encourage dialogue and participation that helps everyone in the family better understand the dynamics that will lead to a successful wealth transfer.  

For each of the six steps below, we’ll provide bulleted items so that you can easily take what’s here and use it as your own actionable blueprint.

Step 1: Preparation 

• ➜ Set clear objectives and coordinate the initial logistics with your immediate clients
• ➜ Understand your client’s goals, their preferences, and what they value
• ➜ Work with your clients to identify key family members, including their next-gen and any expected heirs to the family wealth, to involve in these meetings
• ➜ Share the agenda with the family and key family members required for attendance in advance of the initial meeting (and subsequent meetings)
• ➜ And importantly, work with your client to become familiar with existing trusted advisors and third parties involved in dealing with the client (real estate agents, lawyers, accountants, bankers, etc.)

Step 2: Creating a safe environment for the family

• ➜Establish a respectful and confidential atmosphere where the family is comfortable discussing financial and sensitive information
• ➜ Encourage open dialogue and active listening
• ➜ Ensure all family members feel valued and heard — this may involve ensuring everyone has a chance to table any questions or concerns by quite literally going around the room in order

Step 3: Establishing the family’s goals and values

• ➜ Facilitate a discussion where one of the primary goals is to identify aspirations and values that are shared by family members
• ➜ It’s important here to make sure that conversations are centered around wealth, legacy, and purpose
• ➜ The ultimate goal is to foster unity and alignment among family members; this will involve making sure individual goals and values from all family members are discussed

Step 4: Educate and empower clients and the next generation

• ➜ Provide access to educational resources (articles, videos, whitepapers) to as a way to help improve basic financial literacy and overall financial wellness
• ➜ Focus on delivering education around financial topics that are relevant to the family’s current situation and their future goals as a family unit to reinforce the family vision
• ➜ Empower younger family members to express their perspectives and more importantly, to take action
• ➜ Cultivate their understanding of wealth management principles

Step 5: Develop the Wealth Transfer Plan

• ➜ Collaborate with the family (and key family members) to address estate planning, philanthropy, legacy, and succession as critical components of the plan
• ➜ Involve legal and tax advisors as foundational advisors for creating the plan
• ➜ Document decisions, suggestions, and recommendations, and outline the next steps for the family as a unit and for individual family members for overall legacy and succession accountability

Step 6: Ongoing documentation and review  

• ➜ Family Meetings and intergenerational planning are never a “one-and-done” ordeal. It’s important to establish ongoing communication with the family and to encourage key family members to follow through with their individual responsibilities
• ➜ As situations and scenarios change, which they often do in life and with finances, your role will be the review and adapt the plan to the breadth of changing circumstances
• ➜ Address concerns, celebrate milestones, and reinforce family values

The Family’s Digital Vault is the backbone of it all

In today’s rapidly evolving landscape of wealth management, where families span multiple generations and geographies, the importance of effective communication and seamless access to critical information cannot be overstated.

This is precisely where and why a secure digital vault plays such an important role — and completely transforming the way wealth management professionals, firms, and family offices facilitate multi-generational family meetings.

Digital Vaults act as the centralized hub of family information, streamlining the flow of information and documentation, and ensuring critical information and documentation are accessible on-demand for key family members, and importantly, for key Trusted Advisors.

Traditionally, the organization and retrieval of sensitive financial documents and data for family meetings presented a significant logistical challenge. Advisors and firms had to sift through countless physical files, navigate complex folder structures, and manage a myriad of formats – all while ensuring security, confidentiality, and of course, compliance. This often led to inefficiencies, delays, and potential information gaps.

Fortunately, secure digital document vaults like the Personal Life Management Vault™ address and overcome the many challenges by making it easy, secure, and efficient to upload, manage, access, and share a range of documents, including financial statements, legal agreements, estate plans, tax records, investment portfolios, business documentation, and more.

With families dispersed across different regions, continents, and timeframes, the vault enables advisors, family members, and additional third parties (accountants, lawyers, agents, etc.) to connect, collaborate, and access information in real-time.

Preparing for multi-generational family meetings becomes a streamlined process, as advisors can readily compile and share relevant documents, presentations, and reports all within the Vault. This ensures that every family member is well-prepared and informed, fostering more productive discussions and strategic decision-making during the meeting itself.

Frequently Asked Questions

Question 1: Why should my firm and advisors prioritize hosting Family Meetings?

Hosting Family Meetings offers several significant benefits, including the retention of family relationships and assets, a deeper understanding of family dynamics and information, building trust with the next generation, and increasing the value of your advisor’s practice while setting the stage for a successful succession plan.

Question 2: What role does the advisor play in facilitating Family Meetings?

The advisor’s role in Family Meetings is that of a Trusted Facilitator. While you guide and facilitate the conversation, the meetings belong to the family. You help create a comfortable environment, ensure everyone understands financial topics, encourage dialogue, and assist the family in understanding dynamics crucial for a successful wealth transfer.

Question 3: How do I prepare for hosting effective Family Meetings?

To prepare for successful Family Meetings, it’s essential to set clear objectives, coordinate logistics, understand your clients’ goals and values, involve key family members, share the agenda in advance, and familiarize yourself with existing trusted advisors and third parties involved in dealing with the client.

Question 4: What is the significance of a secure digital vault in multi-generational family meetings?

A secure digital vault serves as a centralized hub for family information, streamlining the organization and retrieval of critical documents. It facilitates easy, secure access to financial statements, legal agreements, estate plans, tax records, and more, enabling advisors, family members, and third parties to connect, collaborate, and access information in real-time.

Question 5: How do Family Meetings contribute to intergenerational wealth transfer?

Family Meetings play a vital role in intergenerational wealth transfer by establishing an open dialogue where family members can discuss goals, values, and legacy. They educate and empower the next generation, address estate planning and succession, and encourage ongoing communication and adaptation as circumstances change, fostering unity and alignment among family members.