The greatest intergenerational wealth transfer is on the horizon. In fact, studies report that $1 trillion will pass to the next generation every year for the next 50 years. As the wealth created by baby boomers is passed on to children and grandchildren, financial advisers who have worked hard to establish their firms may begin to see their own wealth dwindle. That’s because some 90% of children who receive an inheritance will not keep their parents’ financial adviser.
While this might sound dramatic, the trend is not new. For some time, women in large numbers have been changing financial advisers after their husbands die. The problem is the same with children and grandchildren. Advisers often focus their efforts on the patriarch of the family without building a relationship with their spouse, partner, or other family members. Now when wealth transfers from spouses or one generation to the next, it more often than not also transfers out of the adviser’s firm. So, how can advisers help their clients manage this epic generational wealth transfer while continuing to build their firms?
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