Capitalize On The Largest Intergen Wealth Transfer In History

Capitalize On The Largest Intergen Wealth Transfer In History


Utilize Legacy To Capitalize On The Largest Intergenerational Wealth Transfer In History

The Opportunity:

Every year for the next 50 years, $1 trillion will pass from one generation to the next, resulting in the greatest wealth transfer in the history of the United States – (Schervish 2001).

For financial advisors the question becomes, “Who will heirs turn to for guidance in managing that wealth?” – Engaging and Retaining Families: IMCA Article, Sept/Oct 2010 – Diane Doolin, Vic Preisser & Roy Williams – Who will heirs turn to for advice?

The Challenge:

“90% of assets transferred to the next generation don’t stay with the parents’ existing advisor”
– Financial Planning May 2013

“Approximately 70% of women fire their financial advisor within a year of being widowed”
- Spectrem Group, Study of Wealth Women Investors – June 2011

At the death of the 1st spouse the average Financial Advisor retains the clients assets less than 50% of the time.  At the death of the 2nd spouse the advisor retains assets 2% of the time. – CEG Worldwide

Many advisors are missing an opportunity to grow their practice among an important demographic – the adult children of existing clients.  Only 29% of financial advisors indicate that they have a specific strategy in place for obtaining the business of the children of their current clients. –, Cultivating The Next Generation

“Only about 3% of Financial advisors actively pursue their client’s children’s’ accounts.”
–, Cultivating the Next Generation

The Gap:

Less than 1/3 of Boomers and Elders have had a comprehensive discussion about all aspect of inheritance and Legacy.  There is a significant gap between what people are saying and doing. – Allianz American Legacies Study

Personal discomfort with the topics of inheritance and death are the biggest barriers to discussion. – Allianz American Legacies Study

What’s Most Important?:

“Values and Life Lessons” are overwhelmingly considered the most important part of a Legacy – Allianz American Legacies Study

Money is the least important aspect of a Legacy transfer to both Boomers and Elders – Allianz American Legacies Study

“Legacy is a more compelling, comprehensive and hopeful concept than inheritance. A true legacy is a combination of emotional and financial elements, while an inheritance is purely financial ”
– Allianz American Legacies Study

Boomers indicate that preserving their parent’s Legacy is more important than receiving their inheritance – Allianz American Legacies Study

Fulfilling last wishes and distributing personal possessions are five times as likely to be the greatest source of conflict during a Legacy transfer as the distribution of finances among those whose parents are no longer alive – Allianz American Legacies Study

The Midas Curse:

“Shirtsleeves to Shirtsleeves in Three Generations… Research shows that family wealth rarely survives for very long, with 70% depleted by the end of the 2nd generation, and 90% by the end of the 3rd”
– Wall Street Journal, Lost Inheritance, March 2013

These statistics illustrate the importance of helping one’s heirs inherit important values before they inherit the value of what one owns.

The Need For Differentiation:

Focusing on values adds a personal element to your practice that will differentiate you from your competitors. It can help you build lifelong—possibly multi-generational— relationships. And, it can generate referrals. – Dutsche Asset & Wealth Management – The Affluent Woman – The Ledger May 2014

Unique Strategies Are the Key to Success in Traditional Wealth Management Morningstar Observer Sept 2013 – Competition for high-net-worth clients is likely to increase significantly.  Households with between $500,000 and $5 million of investable assets control more than half of U.S. investable assets.  We think competition for these clients and the advisors that serve them is likely to be increasingly intense in the medium term, which will make it harder for firms to fortify their moats or reliably earn excess returns.

What Are Some Of The Ways You Can Become The Trusted Advisor To The Whole Family?

Utilize Legacy to begin connecting with your clients and prospects on a deeper and more meaningful level.

Take advantage of the fact that most other professionals often overlook this Legacy component of planning – making it extremely difficult to find this type of client experience and level of service elsewhere.

Demonstrate that it’s important to you that your clients take the steps to properly prepare for the transfer of the emotional aspects of Legacy along with items of emotional significance rather than simply an inheritance.

Utilize Legacy to help start bridging the gap between generations, and connect the family by bringing them together around more emotional aspects, not just financial.

Harness the power of Legacy to begin cultivating relationships with the next generation, and engage them through family history and heritage.


by Mark T. Davis

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Mark T. Davis

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