For many advisors, inheritors are an intriguing market. We all know that one of the best ways to garner new assets is to capitalize on those moments when money is in motion—during a divorce, for instance, or when a business is sold. And it's hard to imagine a moment that exemplifies money in motion more than when assets are passed from one generation to the next. When you consider the lofty numbers thrown around regarding the upcoming transfer of wealth—advisors frequently cite predictions that the baby boomers will collectively inherit an astounding $41 trillion over the next 40 years—it's easy to understand why lots of advisors are anxious to pursue the inheritors market.

The opportunity to build a great business by serving inheritors can be trickier than you might think, however. In many of my columns, I emphasize the importance of building your business around a single niche market whose members are likely to have similar occupations, live in a certain region and face similar financial challenges. And while inheritors might seem like an ideal niche market at first glance, the fact is that inheritors are of every age, occupation and location. They really share only one thing in common: They've inherited money.

This doesn't mean you should simply avoid trying to attract inheritors. It means that if you do, you must position yourself carefully and thoughtfully in order to win their business.

Big Changes

It's important for financial advisors to understand the profound effects that inherited money has on inheritors when developing a strategy to work with them. For example, nearly one-fourth (23.6%) of inheritors who received $3 million to $5.9 million quit their jobs, according to a survey of inheritors by Merrill Lynch Investment Managers and Prince & Associates. About the same percentage of those inheriting $6 million to $10 million-24.5%—left their jobs.

Inheritors also reported significant shifts in their lifestyle and spending habits. Among the group inheriting $3 million to $5.9 million, 69.8% said their lifestyle changed dramatically because of the new money—and 84% of the $6 million to $10 million group agreed.

These changes, not surprisingly, are good news for financial advisors. As with most of the affluent, inheritors want to work with advisors. Close to 100% of the surveyed inheritors said they wanted to work with an advisor because they were overwhelmed by the money they inherited and felt that it was too much for them to invest wisely. And nearly all said they didn't have the time needed to focus on investing. Finally, approximately half of the inheritors said they wanted to work with a financial advisor to "gain the peace of mind" that comes from trusting a professional with their new-found wealth.

Making the Cut

Such newly inherited wealth clearly spells opportunity for planners, as inheritors typically want professional financial guidance. But the important question is this: Will they want to work with you, specifically? Unless you're perfectly positioned, the answer is a resounding "no."

Consider that approximately 80% of the surveyed inheritors switched advisors after they received their assets. Why is this? After all, most advisors assume their clients are loyal and that a client who receives a big inheritance will keep working with the advisor who has been helping him or her for years or even decades. One big reason is because inheritors want to work only with those advisors who specialize in serving the affluent. So if you don't already focus on affluent clients, inheritors are probably going to look elsewhere for advice.

This fact has enormous implications for many advisors and their current approach to business. The prospect of some smaller clients someday getting a big inheritance causes many advisors to retain those clients—even if they are currently unprofitable and not ideal matches for their firms.

The research should serve as a big wake-up call: Those clients will almost always feel they've changed in fundamental ways—and will likely feel they've outgrown you and your "limited" expertise as a result.

The efforts you've made at building the client relationship up until the inheritance won't matter much, and there is little you can do to keep these clients. Your ability to serve them well as smaller investors will be perceived as a detriment to meeting their needs as affluent investors.

Similarly, many advisors believe that they will be able to work with the adult children of their existing clients once those clients pass away and leave money to the kids. Advisors thus try hard to develop deeper relationships with these children by holding family meetings and having another advisor in the firm work with the kids, among other strategies.