Next-Generation Business Development and Services

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The rationale for putting a strong and comprehensive plan in place to serve the next generation of investors is simple. An article on CNBC stated:

  • For financial advisors, the transfer of wealth from baby boomers to heirs over the next two decades is a bit like climate change: The consequences may eventually be huge, but it’s easy to ignore the issue in the short-term.
  • Cerulli Associates estimates that as much as $68 trillion will move between generations within 25 years.
  • Most studies suggest that 80% or more of heirs will look for a new financial advisor after inheriting their parents’ wealth.

A tremendous amount of money will flow over the next 25 to 35 years or so from about 70 million Boomers (born 1946 to 1964) to about 65 million Generation X adults (born 1965 to 1980) and/or the Millennial Generation (born 1981 to 1996).

About 60% of affluent investors met with their first financial advisor before the age of 45. This means you have already potentially lost a great share of today’s younger Generation X prospects.

Ideally, financial advisors need to establish relationships with millennials before they reach the age of 35. In the referenced CNBC article, Peter Mallouk, head of RIA Creative Planning, said, “I expect we’ll see a tipping point in the industry in about five years,” and “The industry is unprepared for this wealth transfer.”