There go many of those assets you built up over decades and decades: Your practice could blow up as American wealth changes hands.
These were among the warnings from George Walper, president of the Spectrem Group on Monday as he spoke at a session on wealth transfer at the Investments and Wealth Institute conference on in New York.
How could your practice get bushwhacked?
Some advisers are in danger of losing high net worth clients. They are not correctly identifying the services they want and they are too late in paying attention to the next generation of wealthy investors. If, by age 25 or earlier, you haven’t met a high-net worth client’s son or daughter, you are in danger of losing the client.
“You can do all the research with the older generation about the services they need. That’s good. But you also need to ensure that you are going to be able to hold on to the next generation of assets,” Walper said. “The key factor is meeting the next generation between the ages of 18 to 25. You better know the kids at that point in their lives.”
He noted that the great wealth generational transfer, in which trillions of dollars will move from one generation to the next, has already begun. He said the great wealth transfer started some three years ago.
“Wealthy investors feel their advisors should meet their children by at least the age of 21,” Walper said.
He added that, while the number of wealthy households has reached an “all-time” high at some 31 million, who is generating the wealth is changing.
Walper, in referencing several Spectrem Group studies, said great wealth, is not largely controlled by the elderly unlike common stereotypes. In fact, he said that the greatest wealth is now being created by young people.
“The $25 million plus wealth segment is the youngest segment of investors with an average age of 47 compared to an average age of 62 for millionaires,” according to Spectrem Group research.