Generational Client Transfer: Creating a Sustainable Client-base for the Future

Anyone who has attended a client appreciation event for a financial planning firm recently may have noticed that the majority of attendees fell into the same age bracket — and that age bracket was greying. Amidst this distinguished crowd, the coveted Millennial demographic seems to have gone missing — with the exception of the waiters and host firm analysts.

There seems to be a misconception out there that children will automatically adopt the service providers of their parents. When you were in your twenties, were you excited to follow in your parent’s footsteps or were you itching to pave your own path? Think about the demographic of your client base and consider where you’ll stand when wealth changes hands.

It’s no secret Millennials have very close relationships with their parents. However, an automatic client transfer is not a given. Reaching out to younger demographics has long been a trend in the insurance and financial planning industries, particularly with the aim of gaining their loyalty before they commit to their parent’s provider. Many marketers believe real opportunity lies in the close Baby Boomer parent and Millennial child relationship. Astute wealth managers utilize this relationship to put in place forward-thinking strategies  designed to prepare their business for the upcoming great transfer of wealth.

Here are some simple ways to capitalize on that close parent-child relationship and ensure a sustainable client-base in the future:

You can’t buy what you don’t know

Millennials don’t know about finances. According to PWC and George Washington Global Financial Literacy Excellence Center study “Millenials & Financial Literacy,” only 24% of  respondents aged 23-35 demonstrated basic financial knowledge. 30% are overdrawing their checking accounts. A staggering 81% have at least one long-term debt obligation. Only 12% seek help on debt management. 27% sought help on saving and retirement. So why aren’t entrepreneurial-minded, tech-driven Millennials reaching out to advisors more often? Could it be a vanity-driven lack of confidence due to a lack of baseline financial understanding? Here is where you can step in.

A great way to build relationships with your client’s Millennial children is to give them exactly what they need: an education, but in a digestible, intuitive way . Even though finances can be confusing to this generation, it is top of mind. Once they trust their own knowledge of investing, they will be able to trust you as well. Host events for your clients and encourage them to bring their kids. Turn current clients into your brand evangelists by teaching them how to communicate with their kids about finances without being overbearing. Host short webinars with engaging graphics. Distribute an digital newsletter with short tips and terms. Create an interactive online portal with tools, relevant articles, and a live chat feature. Get Social. In other words, create a sense community around generational conversation about legacy, wealth building, and make it exciting.

Bring their voice to the table

Would you purchase an Amazon Echo, the latest iPhone, or a FitBit without first asking your children? Probably not. Millennials have been acting as consultants to their parents from an early age. That collaboration and meaningful role in decision-making are key engagement tools with this generation. Ask your current clients to invite their children to relevant meetings. Suggest topics that would benefit from this collaboration such as: philanthropic giving, college funding, long-term care options, and expectations of wealth transfer. This is one key way to begin creating organic relationships with the children.

Offering a financial education and allowing their voices to be heard can help you and your firm cultivate solid relationships with Millennials. The last thing you want is for wealth to change hands and walk out the door. Hopefully at the next client appreciation event, hair colors of all shades will be chatting together and each generation will be represented.

SOURCE: Price Waterhouse Coopers (2015). Millennials & Financial Literacy – The Struggle with Personal Finance. Retrieved from