The great wealth transfer: turning heirs into clients

The wealth management industry is standing at a historic inflection point. After three decades of unprecedented expansion driven largely by the baby boomer generation, trillions of dollars are now beginning to change hands.

This “great wealth transfer”, the largest in modern history, is no longer a future event but an active and accelerating reality. As boomers age into their retirement years and beyond, their Gen X, millennial and Gen Z heirs are set to inherit vast sums over the next two decades.

This demographic shift presents both a strategic threat and a generational opportunity. Most wealth managers have built their businesses on the preferences, goals and communication styles of baby boomer clients.

Research consistently shows that once wealth is transferred, most heirs do not stay with their parents’ adviser. The implications are clear. Unless firms evolve quickly, their assets under management will be at risk. The question is not only how advisers manage wealth transfer, but how they build meaningful and durable relationships with the next generation of investors before the transfer ever occurs.

While the parents are still active, advisers should be proactive in establishing relationships with their adult children and making them feel important, appreciated and understood. Growing numbers of traditional wealth managers are now offering estate planning services in the interest of client retention.

It is important for advisers to involve clients’ wealth transfer plans, so that they can clearly understand their wishes, encouraging transparency with heirs and suggesting they start joining the regular portfolio reviews. 

Moreover, advisers need to show genuine interest in heirs as individuals. Few people follow in their parents’ exact footsteps. They have different life priorities, definitions of success and other ideas about money and its role in their lives. The key is working with them to understand their goals, which may differ entirely from their parents’ goals. Banks and their relationship managers should not be waiting to have meaningful conversations with those who inherit their clients’ wealth.

New adviser cohort

A key but often overlooked way to connect with heirs is by building a multi-generational advisory team. Just as baby boomers are ageing, so too is the wealth management industry. The average age of a financial adviser is around 56. Many are expected to retire in the next decade. The great wealth transfer is an incentive to recruit fresh talent for generational succession. 

Younger clients — Gen X, millennials and Gen Z — are likely to relate better to advisers who share their communication style, values and tech-savvy mindset. This doesn’t replace experienced advisers but enhances the firm’s relationships by ensuring the team resonates across generations.

Unlike boomers, next-gen investors are digital natives shaped by lifelong tech use. Earning their trust means delivering a seamless, on-demand experience across their preferred channels and devices. Tools like client portals and branded mobile apps are now essential, empowering clients with self-service options while enhancing the adviser’s high-touch service.

Internally, adviser team should be equipped to deliver more personalised service, with instant access to a complete picture of each client relationship, from contact information and meeting notes to risk profiles, trading activity and portfolio holdings.

Some managers go so far as to create profiles for their current clients’ beneficiaries in their CRM systems. When heirs receive their inheritance, they are already established in the firm’s client base.

Technology is often thought of primarily as an internal efficiency driver, with seamless integrations and streamlined workflows. Technology strategies should focus on enhancing the client experience and strengthening the relationship. Today’s technology gives wealth managers many different touch-points to be present in clients’ lives outside of face-to-face meetings.

Adapting infrastructure

Recent industry research shows private banking clients aged under 43 are more open to diversification beyond traditional stocks and bonds. The heirs to the baby boomer fortune are exposed to a deluge of financial market information over the internet.

They want to know about opportunities in private equity, private credit, direct investments and other unlisted asset classes. They’re also trying to understand crypto. This helps explain in part why retail investors are the fastest growing segment of the alternative investments arena, with 90 per cent of advisers integrating retail alts into their clients’ portfolios.

The next generation is also fueling the growth of ESG-based and impact investing. A private banking study from Morgan Stanley found a sizeable majority of investors aged under 42 own sustainable investments, compared to only around one quarter of investors across all age groups. This creates demand for more personalised investment solutions and separately managed accounts to reflect investors’ preferences and values in addition to the expected returns.

Forward-looking wealth managers should be able to help younger investors navigate this more complex landscape. Their advice must be backed by a technology infrastructure which can support highly diversified and highly personalised investment strategies at scale.

In the end, successful wealth transfer strategies are not about guarding assets. They are about earning the trust of a new generation. Advisers who show genuine interest in heirs’ priorities, communicate in ways that resonate with them and offer technologically supported personalisation at scale will stand out in a crowded market.

The firms that retain inherited wealth will be those that treat beneficiaries as valued clients from the start, not as an afterthought once money moves. With the right mix of human connection, multigenerational talent and modern infrastructure, wealth managers can turn today’s heirs into tomorrow’s most loyal clients. Now is the time to stand out.

Steve Leivent, co-head of SS&C Wealth & Investment Technologies