Advisers who connect early with inheritors more likely to work together, new research shows

New research conducted by Nuveen and based on interviews with over 500 US-based investors, has revealed that 64 per cent of inheritors who were introduced early on to their family’s adviser went on to work with that adviser, as opposed to seeking out a different source of advice.

Interestingly, the research found that 80 per cent of wealth inheritors who first met the adviser as a child or teen decided to work with them, compared to 54 per cent of those who met them as an adult.

“Making early connections is critical, but advisers may struggle to think of ways to connect with children and teens,” Jeff Carlin, global head of wealth advisory services at Nuveen, said.

“Advisers should look for such opportunities — for example, by including younger generations in social events — and take time to understand their interests to better form a genuine connection.”

Nuveen found that 87 per cent of future wealth inheritors intend to actively seek advice and plan to have an adviser at the time of the expected wealth transfer.

These findings are particularly relevant to the Australian environment where, by 2035, upwards of $220 billion a year is expected to be passed down by the baby boomer generation, with a total of $3.5 trillion set to cascade down Australian family trees.

“There is going to be an unprecedented transfer of wealth from one generation to another,” said 24kWealth financial adviser Stuart Woodbridge earlier this year.

“This means that we must be thinking about this shift now and how we work with families,” he added.

According to Nuveen, wealth inheritors want to achieve multiple competing goals with their wealth, with nine in 10 assigning top importance to having enough to support their retirement lifestyle and achieving financial stability and independence. However, nearly six of 10 want to pass wealth to future generations and fund the education of children or grandchildren, and half want to give to charity or fund a financial legacy.

As such, Joy Crenshaw, head of global sales and adviser development at Nuveen, suggested advisers position themselves as advice orchestrators, overseeing the client’s overall wealth and planning, and coordinating the efforts of other specialists.

“We believe advisors can create a multi-generational pipeline of clients that can help fuel their practice growth,” Ms Crenshaw said.

“By understanding what wealth inheritors want and structuring their service accordingly, advisers can capture their share of a multi-trillion-dollar asset opportunity,” she added.

Similarly, Mr Woodbridge has recommended engaging with inheritors and working with the whole family unit to ensure that the transfer of wealth is smooth and seamless.