A recent survey by Naxtisis Investment Managers reveals that financial advisors worldwide are concerned about retaining clients and assets during the impending "Great Wealth Transfer." This massive transfer of over $84 trillion in assets over the next two decades is seen as a significant threat by 41% of advisors.
The survey, conducted among 2,700 advisors across 20 countries, found that 30% worry about retaining assets from clients' spouses or children. While advisors report retaining 78% of relationships when spouses inherit, this drops to 58% with clients' children. Overall, 22% of advisors have already lost significant assets through generational attrition.
To combat this trend, advisors are aiming to add an average of 16 new clients annually and grow their AUM by 11%. Relationship-building is cited by 92% of advisors as their primary retention strategy. Many are extending family wealth planning discussions to clients' family members and offering additional services like trust and networking services.
However, advisors face challenges in prospecting for new clients, dedicating only 8% of their weekly time to this task. They're prioritizing pre-retirees and those entering retirement, with 96% focusing on the 50-60 age group and 88% on the 60-65 age bracket. Interestingly, 46% are also targeting younger accumulators aged 35-50, while only 14% are prospecting among the 18-35 age group.
To enhance their prospecting efforts, about half of the advisors plan to create dedicated prospecting teams. Many are also leveraging social media strategies (43%) and considering AI-powered tools (21%) for client acquisition.
Dave Goodsell, executive director of the Natixis Center for Investor Insight, emphasizes the importance of asking existing clients for referrals as a key growth strategy. He also notes that deepening relationships with clients and expanding financial planning services will be crucial for long-term success in the face of these demographic shifts and competitive pressures.
As the wealth transfer accelerates, advisors must adapt their strategies to navigate both short-term economic risks and long-term business challenges to ensure the continuity and growth of their practices.