As the baby boomers age into retirement, managers of
multigenerational wealth wont find their jobs any easier.
For starters, they may have to forge ties with family clients
all over again. Richard Stone, founder and chairman of Private
Ocean, a San Rafael, Californiabased firm overseeing
nearly $900 million in assets, has spotted a trend: heirs
abandoning their parents investment strategies and
advisers. As a wealth management firm that is
counting on multigenerational relationships, how do you
position yourself to make sure that youre the adviser for
that new generation? Stone asks. Thats a big,
big theme right now in the industry.
Managers must also convince current family heads that
its time to begin ceding some power to the kids.
The boomers dont like to admit that they are
getting older, and they dont like the idea of giving up
control, says Beth Landin, who oversees client
relationships for Market Street Trust Co., a Corning, New
Yorkbased multifamily office with more than $1 billion
Boomer households those between ages 49 and 68
accounted for some 60 percent of the $13 trillion in assets
overseen by U.S. mutual fund managers in 2012, industry group
Investment Company Institute reports. But members of the
generation born after World War II have often delayed making
necessary plans and broaching unpleasant topics such as
diminished physical and mental capacity later in life,
according to Landin. Market Street isnt afraid to raise
those questions with clients. We speak with our families
about every aspect of the process, from preparing ahead for
in-home medical care to deciding which child will be the point
person for making financial decisions and which one will handle
parental care needs, Landin says.
The age of clients when they inherit wealth will have a big
impact on managers ability to maintain ties with
families, experts note. Aged 18 to 29, millennial clients have
a different attitude than their older, Generation X
counterparts. While Gen X members tend to be more
financial advisers, the good news is that millennials may
be easier to retain as clients, says Kim Lear, a
researcher with BridgeWorks, a Minneapolis-based consulting
firm that helps investment firms and other businesses manage
multigenerational communication internally and with clients.
BridgeWorks research suggests that parental opinions have
a greater influence on millennials than on prior generations,
so an adviser can build lasting bonds with young family members
by having them join meetings with Mom and Dad. If they
see that you have their parents confidence, that will go
a long way with that generation, Lear explains.