keyboard with hot key for estate planning

Advisors hoping to retain assets will have to actively build genuine relationships with the children of high net-worth investors (HNWIs) long before any wealth transfer actually takes place, says U.K.-based research firm GlobalData.

Connecting with the next generation early on, and giving them direct experience in managing the family wealth, is seen as the most effective way to ultimately retain assets. In particular, GlobalData’s latest survey of wealth managers finds that respondents believe involving the prospective heirs of HNWIs during the estate planning process, “is the most influential way to retain them.”

“Simply opening a youth account in an heir’s childhood will not be enough. Our survey shows that less than half of such accounts transform into a proper relationship with the bank in the successor’s adulthood,” says Sergel Woldemichael, analyst at GlobalData, in a statement.

“The next-gen builds their own relationships with advisors and tends to bank with different providers than those used by their parents. Consequently, preserving family assets after inheritance will be a tough nut to crack for wealth managers,” he adds.

To succeed, the firm recommend that advisors start early, long before any asset transfer is imminent.

“Relationships take time to build, and the earlier advisors start, the more time they will have to gain a good position to showcase why they are better than the competition. Wealth managers that understand this will win out as one of the largest intergenerational wealth transfers to date unfolds. The alternative is watching how inherited assets flow to the competition,” says Woldemichael.