Advisors expect to lose nearly half of next generation heirs

Advisors professional advicemohamed_hassan / Pixabay
  • US financial advisors think only 57% of client heirs will retain their services
  • One in 10 US advisors never meet the children or heirs of primary clients
  • US advisors say attracting younger generations and the wealth transfer are top challenges

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(London, March 2020) US financial advisors are failing to adequately prepare for the wealth transfer and expect to lose nearly half of next generation clients, new research shows.

A CoreData Research study found financial advisors in the US think only 57% of client heirs will retain their services after the primary client passes away. Advisors in the UK expect an even lower percentage (42%) of heirs to stay with them.

Advisors Are Struggling To Engage Client Heirs

The study, which surveyed 520 advisors across the US and UK, shows advisors are struggling to engage the heirs of existing clients. Indeed, one in 10 (11%) US advisors say they never meet the children or heirs of primary clients. However, a higher proportion of UK advisors (19%) never meet client heirs.

Furthermore, half of advisors in the US (51%) say they meet the heirs of clients less than once a year. This compares to 35% of UK advisors meeting heirs less than once a year.

But when asked what they are doing to retain the heirs of primary clients when they pass away, the number one strategy – cited by almost three-quarters (73%) of US advisors — is actively building relationships with heirs.

“These findings reveal a worrying disconnect between what advisors purport to be doing to prepare for the intergenerational wealth transfer and what they are actually doing in practice,” said Craig Phillips, head of International, CoreData Research.

Retaining Next Generation Clients

Other measures US advisors claim to be taking to retain next generation clients include encouraging existing clients to put together an estate plan (63%) and offering free services to client heirs while primary clients are still alive (39%). About a third say they are improving their technology and digital tools (36%) and providing workshops or tutorials for client heirs (34%).

While US advisors may not be taking concrete steps to engage with client heirs, they nevertheless point to attracting younger generations (84%) and the wealth transfer (83%) as two of their top three most challenging business risks.

Regulation and disclosure (84%) is seen as another key business risk – something that UK advisors (94%) consider even more challenging than their US peers.

“Regulation is something that advisors on both sides of the Atlantic find challenging,” added Phillips. “But while advisors cannot rewrite the regulatory rulebook, they can and must implement actionable, family-centric strategies to engage with and retain client heirs — measures that will help future-proof their businesses.”

Key Findings

What percentage of your primary clients' heirs do you think will retain your services after your client passes away?

client heirs

How often do you meet your primary clients' children/heirs?

client heirs


About Us

CoreData Research is a global specialist financial services research and strategy consultancy. CoreData Research understands the boundaries of research are limitless and with a thirst for new research capabilities and driven by client demand; the group has expanded over the past few years into the Americas, Africa, Asia, and Europe.

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About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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