The long-awaited Great Wealth Transfer is upon us. Various sources suggest between $10 and $50 trillion of wealth will move from older generations to younger ones in the coming decade. And for anyone counting, that is a lot of money.
Additionally, research suggests that this wealth will transfer to a smaller, yet more diverse group compared to previous generations. While there will be even fewer people managing more wealth, this group will not look or act like its predecessors. This dynamic presents a meaningful opportunity for nimble wealth management firms.
By working to develop family offices for the modern ultra-high-net-worth family, firms can take full advantage of the Wealth Transfer, deliver a better product to clients and bring aboard advisors interested in working with clients who demand more services and are willing to pay for them.
A Modern Family Office
There’s been a meaningful shift to better understand the family power structure, which could include women as heads of households, sibling relationships, LGBTQ+ families and many other variations. It’s now the advisor’s responsibility to understand these dynamics and communicate accordingly. While the golf course lives on, it no longer is a primary source of business development.
Enhancement Of Tools And Offerings
With the reality of endless information through the internet and AI, clients know more today than in the past. Many clients will have significant experience managing their own money, as they may have done so personally prior to receiving an inheritance. This means advisors will need to provide a broader range of offerings that require a greater degree of expertise than in the past. Firms must bring together the best tools and platforms needed and have the flexibility to integrate outside resources and relationships within the family office construct.
A Different Way To Think
For generations, the approach to UHNW family management has been static—and for good reason; it worked well. However, the next generation of HNW and UHNW individuals and families will require different thinking. The massive shift in technology, evolutionary norms across gender, money and power, and changing expectations of these communities make this market completely different than it was even 10 years ago. It will be critical for firms to work quickly to establish programs that support these new realities but also develop meaningful feedback loops that allow them to address the needs of this dynamic demographic.
The opportunity to drive growth for this segment is palpable—especially for firms willing to listen and adapt to support a broad range of client needs. Much like the family office service itself, firms that can remain agile in the face of these savvy dynamics will drive meaningful growth for generations to come.
Tarah Williams is president and COO of Prospera Financial Services.