In August, Barron’s Penta ran a profile on Pitcairn, one of the oldest and best-regarded multifamily offices in the U.S., focusing on some of its struggles with generational change. In addition to long-term employee turnover and the integration of new technologies, the organization recently saw upwards of $800 million in assets walk out the door when one of its major clients died and the surviving family members exercised their right to change.

This situation, of course, isn’t unique to Pitcairn—or to multifamily offices. It’s not even a new issue, as the decades-old research that Russ Prince and I conducted with inheritors and single-family offices can attest. The matter is still being explored on a regular basis, but the outcome never differs: Youth is compelled to act in ways that boldly demonstrate its differences from previous generations.  

In truth, the wealth management industry has fretted over Next Gen issues for decades. Some firms now appoint special delegates to work directly with the children of their largest clients—people who can present themselves as young, cool and more in tune with the priorities of Gens X, Y and Z.  Will the effort actually retain assets when the critical wealth transfer occurs? We just don’t know yet.

Is there a workable solution for private wealth managers when it comes to the Next Gen dilemma? I turned to April Rudin, the marketing dynamo referred to as “perhaps the single most knowledgeable person in the entire finance-social nexus these days” by the WSJ blog, Wealth Manager. “It’s not business as usual,” Rudin says. “These individuals value leading-edge technology, access to real-time data, and using their wealth to make a difference. They are global, mobile and listen to each other rather than to their parents. Now is a huge opportunity for firms to embrace this seismic shift—repositioning a company, its principals and its offerings to embody a new suite of value propositions can attract the attention, and the business, of this new generation of wealth.”

So, it’s no longer just about keeping wealth during a generational transfer. These days, firms and professionals must understand how they are perceived by younger audiences, work on increasing their appeal and connection to those consumers and focus on capturing the monies that will inevitably be in motion—sooner than later.