The “Great Wealth Transfer” we’ve all read about has arrived. From 2018 through 2042, Cerulli Associates projects that nearly 45 million U.S. households will transfer $70 trillion in wealth to heirs and charity. Roughly $61 trillion of the transfer will be passed on to heirs—mainly the households’ children.1 What is interesting about the wealth transfer is that it presents a huge opportunity for advisors who are ready for it and a big risk for those who are not.
The opportunity: Demand for support is high
As we’ve shared in the past, 29 percent of advisors said estate/trust planning is one of the top two financial matters their clients are currently planning for or considering, according to a recent Forrester survey.2 As an advisor, clients want and need your advice at this time.
The challenge: Client retention may be very low
Cerulli research also found that only 13 percent of affluent investors choose to work with the same advisor their parents used. Of the remaining 87 percent of investors who reported not using their parents’ advisor, 88 percent of them indicated that they had never even considered doing so.1
The key to retaining your clients and growing your practice during the Great Wealth Transfer will be preparation. Start today by assessing two things:
1. Assess your practice
In order to meet your clients’ needs at this time, make sure that you have the following:
- Robust, effective estate planning software – Financial planning software is not going to be enough. Ideally, you need estate planning software that includes a client dashboard so that clients may be involved in planning for their own future.
- A platform for dynamic collaboration with estate planning attorneys – Many advisors feel that they already have a strong network, including connections to estate planning attorneys. The key is taking it beyond their business card. Do you have tools in place to facilitate collaborative and transparent communication with your network? Passing along contact information and being invited to a few meetings isn’t going to cut it. How will you work together so that you, as the advisor, stays at the center of the client experience?
- A plan for managing relationships with trust administrators – Likewise, work to find trust administrators who specialize in the opening, approving, and monitoring of trust accounts, while you and your client maintain investment discretion and ongoing management of assets and client relationship. How will you collaborate with those administrators, particularly in multiple states? These relationships will require ongoing oversight. Put tools and processes in place now to make that easier.
Having your team and technology in place streamlines the entire estate planning process and helps to keep client relationships strong.
2. Assess your clients
- Talk to your clients – Once you have your tools and your network set up, use them! Now is the time to sit down with each of your clients to assess their estate plan. Where are they at in the process? Do they have a will, power of attorney documentation, or an advanced medical directive set up? If they haven’t started, you’ll need to guide them through starting the process. If they have an estate plan or trusts in place, do they need to make updates? Are their directives still in line with their current needs?
- Talk to your clients’ kids – These discussions are also a great time to engage with future generations. Informed heirs are prepared heirs. How can you help them to feel involved and up to date on the process? What education can you provide? Being a resource to both your client and their heirs is a great way to improve client retention.
As you move through the assessment process, you may identify opportunities to grow your practice, expand your network, and enhance your own book of business. The key is to be proactive. Don’t wait for your clients to ask for help – they may not know what they need, or they may think they are covered. Act now and proactively assess your clients’ estate planning needs.
Ready to dive even deeper into integrating estate planning into your practice?
Join professionals from Envestnet | MoneyGuide and Trucendent for a webinar on June 29, 2022 The session will address:
- Appropriate estate planning strategies for clients of all net worth
- Current estate planning challenges advisor face
- The current attitude of clients towards estate planning needs and the challenges they face to implement a plan
- The importance of conversational competency and multi-generational client relationships
- How to seamlessly integrate estate planning into your practice to meet the needs of clients
Visit this page to learn more and register.
1. “The $70 Trillion Dollar Opportunity Understanding the Implications of Multigenerational Wealth Transfer,” Cerulli Associates, https://info.cerulli.com/rs/960-BBE-213/images/2020-The-70-Trillion-Dollar-Opportunity.pdf
2. “The Evolution Of Estate And Trust Planning Solutions,” Forrester Opportunity Snapshot: A Custom Study Commissioned by Envestnet, January 2022
The information, analysis, and opinions expressed herein are for general and educational purposes only. Nothing contained in this brochure is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. All investments carry a certain risk, and there is no assurance that an investment will provide positive performance over any period of time. An investor may experience loss of principal. The asset classes and/or investment strategies described may not be suitable for all investors and investors should consult with an investment advisor to determine the appropriate investment strategy. Investment decisions should always be made based on the investor’s specific financial needs and objectives, goals, time horizon and risk tolerance. Past performance is not indicative of future results. This material is not meant as a recommendation or endorsement of any specific security or strategy. Information has been obtained from sources believed to be reliable, however, Envestnet | PMC cannot guarantee the accuracy of the information provided. The information, analysis and opinions expressed herein reflect our judgment as of the date of writing and are subject to change at any time without notice. An individual’s situation may vary; therefore, the information provided above should be relied upon only when coordinated with individual professional advice. Reliance upon any information is at the individual’s sole discretion. Diversification does not guarantee profit or protect against loss in declining markets.
FOR INVESTMENT PROFESSIONAL USE ONLY ©2022 Envestnet. All rights reserved.
John C. Yackel , Founder & Chief Executive Officer, Trucendent
John is the Founder and Chief Executive Officer of Trucendent. Trucendent was built for financial advisors and has modernized the delivery of estate planning and the use of trusts. Trucendent’s business solution combines technology with a professional network of attorneys and corporate trustees for financial advisors. Advisors can now capture new assets and extend relationships with this integrated offering. We have the largest intergenerational wealth transfer approaching. Combined with the fact that over 80 percent of heirs terminate the relationship with the advisor after that transfer, Trucendent strives to arm the financial advisor with the tools and skills needed to retain and grow their business.
Before founding Trucendent, John was Head of Strategic Initiatives at Envestnet. He was instrumental in leading strategy, business development, advisor adoption, and growth strategies at Fiduciary Exchange, LLC (FIDx) and Advisor Credit Exchange (ACE). Prior to that role, John was Head of Institutional Business Development at Envestnet and led all new business development activities, had oversight of the bank strategy, and helped to create the OneWealth initiative.