Only 13% Of Investors Keep Their Parents' Advisors

Advisors still have a lot of work to do if they want to retain their clients’ children and heirs, according to research by Cerulli Associates.

A new firm survey shows that only 13% of affluent investors choose to work with the same advisors their parents used.

Of those who didn’t use their parents’ advisor, 88% said they never even considered doing so.

This problem looms large, given that about $60 trillion in assets is poised to pass between generations over the next 25 years, Cerulli said.

Advisors need to be reaching out to the young inheritors of the families they serve before the wealth transfers happen, but most advisors are not taking that proactive approach.

“Unfortunately, this process is rarely at the forefront of advisory practices’ priority list,” said the Cerulli report. Advisors are often too busy attracting and servicing current clients.

The report suggests it’s wise to reach out to inheritors early.

Younger heirs were more likely to stick with parents’ advisors, however: Among affluent investors under 50 years old, according to the survey, 24% retained their parents’ advisors after a wealth transfer. But that dropped to 9% for investors who were 50 years and older.

Meanwhile, only 5% of those in the older group said they at least considered retaining their parents’ advisors before switching to someone else, compared with 21% of those under 50.