We understand. We are looking for partners, and we know what it takes to deliver an unequaled working experience. As a firm built for advisors by advisors, we appreciate the value of personal relationships, and we want to help you grow your business.
In addition to studying trends that impact our client’s investments, our analysts also watch trends in the investment advisory industry. One key trend we are watching is the changing demographic makeup of the professional advisor population.
If you charted the ages of all professional advisors, you would see a clear u-shape in the center of your chart. There are plenty of young advisors and older advisors, but there aren’t as many mid-career advisors. A large proportion of professional advisors are nearing the traditional retirement age. This u-shaped population curve is not unique to the professional advisor population; it is also present in the population as a whole.
Why is this important? During the next 25 years, we will witness the largest ever generational transfer of wealth. Cerulli Associates estimates that $68 trillion will move between generations.
This huge transfer of wealth will affect our industry in countless ways. You’ve likely thought about the ways you can ease this transition for your clients while cultivating relationships with their eventual heirs. You may meet with their adult children and spouses, open trusts and 529 plans for their grandchildren, or maybe you have embraced the online account monitoring tools that younger generations will require.
But, have you thought about where you stand personally and professionally in this huge transfer of wealth? Some estimates indicate that up to 80% of the Millennials and Gen Zs that will inherit wealth in the coming decades will leave their parent’s and grandparent’s advisors. Are you in a position to focus on meeting the demands of your new client base? Do you have a clear path to your own retirement and the eventual transition of your book of business?