The Great Wealth Transfer – the risks and opportunities for Financial Advisors

Over the next 30 years, $38.8 trillion will be inherited in the UK, US and Europe, triggering the greatest transfer of wealth in history. This monumental event, dubbed as the ‘Great Wealth Transfer’, will see funds cascade from the Baby  Boomer generation to Millennials and Generation X’s, with £5.5 trillion being transferred in the UK alone.


This unprecedented intergenerational transfer of wealth presents a vast opportunity for Financial Advisors, but also a significant risk around portfolio loss for businesses who fail to prepare, and as Benjamin Franklin once said ‘by failing to prepare, you are preparing to fail’.


Current research shows that up to 90% of heirs change their advisors after they receive an inheritance, with over 80% of advisors believing that intergenerational planning is the biggest opportunity in the industry at present.


So, let’s take a look at the significant opportunities the Great Wealth Transfer presents to financial advisors and how you can maximise them:


Enrich your client relationships
By discussing how your client goes about protecting their assets, wishes and loved ones for the future you have a great opportunity to broaden your client conversations and gain a greater understanding of their wider financial wellbeing.


– Enhance your service offering
Offering estate planning services to your clients enhances your service offering and provides another important reason to engage with them. Not only could you help your current clients to pass on their assets in the most tax efficient way but you could also become a trusted guide to their spouses and younger generations during the transition period.


– Identify and connect with the next generation 
Guiding your clients through the Great Wealth Transfer will provide you with access to valuable data showing how wealth will be distributed within their families, identifying future beneficiaries and enabling you to begin building relationships with the next generation. Helping you to significantly protect your portfolio and follow the funds you manage.


– Educating future investors
You can play a crucial role in educating heirs about responsible financial practices, budgeting, investing, and risk management. By empowering the next generation with financial knowledge, you can help ensure the preservation and growth of the transferred wealth and position yourself as their trusted advisor for the future.


– Understand the evolving investment landscape
By engaging with younger generations you will build an understanding of their different financial priorities, preferences, and risk tolerances compared to their predecessors. You must adapt your strategies to accommodate these changing needs and expectations. You need to understand the evolving investment landscape, new technologies, and emerging industries to provide relevant guidance.


– Take advantage of the inheritance economy
The inheritance economy is a big business. With an ageing population and rising levels of wealth, we are set to see a substantial growth in the number of inheritances and financial gifts taking place each year. Offering estate planning services to your clients could create a substantial revenue stream for your business.


In summary, the Great Wealth Transfer presents substantial opportunities for Financial Advisors to enhance your service offering, broaden client relationships, understand the wider family dynamic and engage with beneficiaries to help protect your portfolio for the future. Like all things, it presents significant risks too, but having a plan in place to begin supporting your clients through the Great Wealth Transfer will enable you to be ready and maximise the opportunities for your business.


Find out more about how Estgro enables you to offer comprehensive estate planning services, as easily as sending your clients a link. Empowering you to make estate planning and inheritance part of vital financial planning conversations.