It's a grim wealth management statistic: Only 27% of next-gen heirs plan to stay with their parents' financial advisor after they inherit, according to
Yet after decades of working with affluent families across generations, I am not surprised. Advisors may put sophisticated trusts, tax strategies and investment policies in place. But if the next generation does not understand the reasoning behind the plan or know the professionals advising the family, technical infrastructure can only do so much.
Then,
READ MORE:
1. Identify the 'why' behind the wealth
Ask your client to name three values or guiding principles they want their wealth to carry forward across generations. Then ask if they've asked younger family members the same question. I use a version of this exercise with families and have watched a 7-year-old and a 90-year-old independently identify values that aligned far more closely than anyone expected.
Advisors needn't facilitate a governance exercise with the entire family — just identify whether the
2. Share the logic behind the bequests
A parent may leave one child liquid assets and another real estate or an interest in a business. The reasons can make perfect sense to the benefactor, but once they are gone assumptions fill the silence. This is where
The answer does not have to satisfy everyone but it needs to exist. Identify anything in the financial or estate plan that could surprise an heir. Then ask the client whether the reasoning has been communicated. Encourage clients to explain their intent during their lifetime.
When appropriate, offer to be part of that conversation. An heir meeting the financial advisor for the first time after a parent has died is meeting a stranger during one of the most difficult periods of their life, which is not the ideal moment to begin building trust.
READ MORE:
3. Identify next-gen decision-makers
Don't frame estate planning conversations using the phrase, "When you are no longer here." Instead, ask: "If you had a procedure tomorrow and could not manage your finances for three months, who would step in?" This moves the conversation away from fear and toward control.
It also tells you who may eventually become a financial decision-maker for the family. Ask clients to introduce you to the person designated to step in financially during an incapacity. Where appropriate, invite that person to participate in part of a future review. Do not wait for an emergency to exchange phone numbers.
4. Spot the executive 'get it done' family member
In many families I work with, someone is already managing far more of the family's wealth stewardship than anyone formally recognizes. Very often, it's a woman. She is coordinating fiduciaries, tracking family history, communicating across generations and managing aging parents. She may think she is simply being responsible, but in reality she is performing an executive function for the family, often without a title or infrastructure supporting her.
Ask your client: "Who in your family is the person everyone calls when something needs to get done?" Then ask yourself whether you have a meaningful relationship with that person. If you do not, that may be one of the most important relationship gaps in your book.
READ MORE:
5. Rehearse next-generation leadership
Responsibility works better when it is rehearsed. One family I worked with had substantial land holdings and businesses, but their children and grandchildren were scattered around the country.
We created a weeklong apprentice program so interested family members could experience the businesses and the elders could see who was genuinely interested in taking on responsibility. Several eventually relocated and assumed roles, and the program continues today.
The great wealth transfer is not simply a transfer of assets, it is a transfer of relationships. If an advisor's first meaningful conversation with an heir happens after the inheritance arrives, they are already late.
