Until now, baby boomers have defined tastes, and firms looking for a younger client base are going to have to emphasize the needs and service expectations of clients in their high 30s and 40s as their financial lives blossom with new complexities and their assets become more abundant.
Cheses said these problems, exacerbated by Covid-19, have made multigenerational planning more critical, yet many times the advisors have limited contact with the their clients’ children. To that end, Cerulli research suggests the best strategies include regular family meetings, education sessions to teach family members about the purpose of wealth, a planned succession hierarchy, business succession planning, charitable planning that includes the kids, and a family mission statement (which includes things about the family’s core values and heritage).
Cheses recalled an RIA the firm spoke with that lost one of its biggest clients, who passed away during the pandemic, because the advisor had not spent the time connecting with the next generation or the spouse and given them a seat at the table.
“Once the father passed away, the mother ultimately decided to work with another firm. She joined her daughter’s firm. Her advisor was in her 40s and one of the main reasons she ended up leaving was that the firm she went with had a lot more specialty around ESG, which is something she really valued.”
Hiring younger advisors who can create a relationship with the next generation is also key, Cheses said.