How to retain clients during the Great Wealth Transfer

You dial the phone. A longtime client’s account is flagged for follow up. You reach out, only to discover the inevitable: The kids have just inherited — and your firm is out. Gone. Cut loose after decades of service.

It’s not just you. It’s happening everywhere.

8 out of 10 inheritors plan to let their parents’ advisor go

Here’s the wake-up call: Eighty-one percent of younger people set to inherit large wealth from their families plan to replace their parents’ wealth management firms.¹

Yes, you read that right — about 8 out of 10 “next generation millionaires” are gearing up to move their money elsewhere, according to a recent Capgemini survey.

Why? The biggest reasons: poor digital offerings, lack of new services, and stale product menus that don’t fit their lives.²

And here’s the hardest part to swallow: These young people are set to become the next generation of high net worth (HNW) individuals — highly desirable clients for advisory firms. And it’s no longer on a distant timeline.

• 30% of heirs will receive an inheritance by the end of 2030³
• 63% will inherit wealth by the end of 2035³
• 84% by 2040³

Pause for a sense of scale. Cerulli projects $124 trillion will change hands through 2048 —with more than $105 trillion flowing directly to heirs.⁴ Millennials will inherit the most ($46 trillion) over the coming decades, but Gen X stands to inherit the most in the next ten years (about $14 trillion).⁵ This isn’t some financial media hype. The full Great Wealth Transfer dwarfs the U.S. GDP four times over.⁶

Why are wealth managers getting fired by next-gen investors?

Let’s not sugarcoat it. The next generation isn’t just looking for a slick app. They want an entirely new relationship with their advisor that includes:

• Digital-first, always-on experiences
• More investment choices, including crypto and alternatives
• Real-time data, not end-of-quarter mailers
• Advisors helping with their lives, not just their portfolios

For traditional wealth management, this isn’t a simple matter of upgrading your website or building a mobile app. It may be time to rethink your entire business model — how you serve, who you serve, and even what you sell. Let’s dig a little deeper.

“But doesn’t everybody want white-glove financial advice?”

The fact of the matter is that many next-gen investors don’t. Younger generations grew up with mobile apps, on-demand everything, and instant gratification. They don’t want to sit down for an annual review. They expect account data, performance, and recommendations in real time — on their phones.

Let’s break down why the old white-glove approach is falling short, according to Capgemini:

1. Digital natives want real-time financial engagement

“This is not a ‘let’s sit down with you once a year and walk you through how your portfolio is doing,’ or once a quarter,” says Kartik Ramakrishnan, CEO of financial services at Capgemini. “This is an active engagement channel and with consumable nuggets of information that they should get.”⁷

2. Their desired product menu is changing

Private equity, crypto, international options — new heirs want to go where their parents never ventured. Eighty-eight percent say they’re more interested in private equity than the Boomers,⁸ yet most firms still focus on stocks, bonds, and mutual funds.

3. Younger investors want values-based advice

Younger investors are more values-driven and expect Environmental, Social, Governance (ESG) and Socially Responsible Investment (SRI) products as table stakes. They want advice that reflects the world they live in, not just the markets you know.

4.Next-gen heirs want education, not preaching

Today’s heirs don’t trust canned content or impersonal newsletters. They want financial education that’s useful, not dry or patronizing — and they want authentic engagement, not newsletters full of corporate speak. In other words, they want actionable advice that fits into their busy schedules and preferences.

5. Future HNW individuals want lifestyle-supporting advice

Next-gen investors expect much more than investment returns. From medical concierge to philanthropy, luxury travel to cyber protection, they want wealth management to help curate their lifestyle — and help put desired experiences within financial reach.

How can financial advisors attract these next-gen investors?

If you’ve been focused on one-to-one advice, there’s a good chance that you’ll have to reimagine your current business model. Which may feel hard to do while you still have some long-term clients who are counting on your white-glove approach.

Our advice? Don’t throw away those white gloves yet. Instead, fold this segment into a new hybrid digital advice model. We call it Augmented Advice™, and it’s not just robo, not just a friendly phone call, and not just quarterly meetings. It’s the fusion of digital-first infrastructure (to help save advisor time spent on administrative tasks) and genuine, on-demand human counsel — delivered at scale and featuring your firm’s brand (not your custodian’s).

So those white gloves will still come in handy with your legacy clients and the smattering of heirs who need detailed advice right now.

What Is Augmented Advice?

Simply put, Augmented Advice is a ready-made combination of tech-forward automations and algorithms that help free up more time for advisors to provide on-demand human advice. It combines self-service robo features with high-touch personalized advice opportunities — all designed to help you attract and retain the next generation of investors as they accumulate wealth.

Think of it this way: A new heir might not be ready to make big investment decisions right away. That’s okay — one option they can use to open a brokerage account with you in seconds⁹ is Augmented Advice. Then, they can use digital tools to transfer money, complete built-in risk- and goals-based assessments (that are algorithmically mapped to our Model Marketplace), and select one of the model portfolios (created by major professional asset managers, not Apex) to park their inheritance for now.

Because the Augmented Advice model empowers clients to do their own thing — until they’re ready to talk to a human advisor. Then, when they need advice, they’re already your client and can easily request a meeting through their portal or mobile app.

This is where your advisor shines, stepping in at the right moment when their advice is most valued.

Is Augmented Advice just a hot new trend that will fade away?

We don’t think so because a model that offers on-demand human advice has already been proven to move the growth needle for early adopters. According to Tiburon, “digital hybrid advice” (their term) is used by only 2% of fee-based financial advisors — but these firms are attracting 32% of net new flows.¹⁰

How does Augmented Advice address next-gen investor needs?

Let’s get specific about how Augmented Advice addresses the desires of younger investors.

1. Digital natives expect to engage with real-time financial info

What would it take for your firm to offer an investor-facing portal and mobile app with up-to-the-moment positions and cash balances? First, you’d have to find a custodian that provides straight-through processing (not overnight batching). Then you’d need access to your own client data (that’s currently being held by your custodian). Finally, you’d use this data to power a real-time ledger to handle your bookkeeping and records — eliminating the need to reconcile your shadow ledger with the actuals.

Simple, right? No, obviously not — but you don’t have to lift a finger to build the proper infrastructure for your processing, your data, or your real-time ledger. Apex has done all of that for you as part of our Augmented Advice solution.

Learn more about how valuable real-time data is in our whitepaper, “The power of real-time data: 6 ways a real-time data warehouse can transform the investing industry.”

2. Heirs want more investment options than their parents had

As mentioned above, next-gen investors want to tap into a wider set of asset classes, including access to private equity. Does the idea of adding alternative investments to your offerings give you hives? If so, you haven’t heard that alts investing is no longer the untamed jungle of securities, thanks to the innovative Apex Alts platform.

Apex Alts has transformed previously disjointed advisor and investor experiences into a streamlined, unified process by building the entire subscription lifecycle into our core AscendOS platform. Now, alternative investments sit side-by-side with traditional asset classes in client accounts and advisor views — not in separate systems. To further simplify the alts experience, there’s also an integrated alternative investments marketplace designed to help you browse and subscribe to a wide array of fund options.

You can check out more details by reading our Apex Alts and Apex Alts Marketplace fact sheet.

3. Younger generations are interested in social responsibility

Next-gen investors are more likely to care about Environment, Social, and Government (ESG) frameworks and Socially Responsible Investing (SRI) than their elders, with 85% of Millennials and Gen Z expressing interest.¹¹ It‘s not just talk, though; these younger generations are putting more of their money into these values-based investments.

ESG/SRI investing by generation

4. Next-gen heirs want personalized advice, not lectures

Cookie-cutter tips full of “you shoulds” don’t appeal to younger investors. They want actionable advice tailored to their goals and preferences. Historically, this type of individual attention was not available to everybody; fortunately, Augmented Advice was designed to change that.

How? By using tech-forward solutions to make it possible to offer on-demand personalized advice at scale. For example, by using algorithmic integrations with investor risk and goals profiles, Augmented Advice can save time by:

• Streamlining model portfolio recommendations with automated suggestions that align with investor preferences (see Model Marketplace)
• Automating rebalancing down to the fractional share level while staying true to client desires

5. Next-gen investors want personalized, lifestyle-supporting advice

Personalized advice is the gold standard, but it’s hard to scale with legacy technology that can suck up valuable advisor time. That’s why Augmented Advice is designed to save increments of time that can add up to opportunities to help Sue afford that dream vacation with her grandkids and support Bob’s desire to retire early.

Augmented Advice technology empowers advisors with:

• A unified advisor workstation to see your entire business on one screen, reducing the need to switch between different tools
• Automated workflows for tasks like rebalancing, model creation, and direct indexing
• Real-time data, processing, and account status so you always have up-to-date information
• More tools for personalization at scale to better engage with the next generation of investors

Augmented Advice — is it “go time” for your firm?

You’ve read this far — so what’s your next step? Consider downloading the Augmented Advice fact sheet to discover all the features and benefits of this new hybrid digital advice model.

Get the Augmented Advice fact sheet.

Then request a meeting with a sales rep to discuss how Augmented Advice can help you serve more clients without burning out your best advisors.

Request a Meeting