Rich Clients Stick With Their Advisor. Their Children? Not So Much

Don’t worry, clients aren’t going anywhere … for now.

Aside from attracting new assets, an advisor’s biggest worry is holding on to current ones. Thankfully, clients looking for greener pastures elsewhere aren’t the norm. More than half of high-net-worth clientele have only ever worked with one advisor, according to a recent survey from Dynasty. Meanwhile, a quarter have voluntarily changed advisors once, and just 17% have switched twice. 

The bad news is the Great Wealth Transfer is likely going to challenge the status quo. Younger clients are simply more prone to change, said Tim Oden, Dynasty’s chief growth officer. “As their wealth grows, their advisors’ investment strategies and expertise might not grow with them,” he told The Daily Upside.

How Do You Do, Fellow Kids? 

The Great Wealth Transfer is already underway, but 41% of respondents’ adult children do not work with their financial advisor and 34% likely will not in the future, the survey found. In order to attract and retain those younger clients, Oden recommended that veteran advisors take steps to address succession plans early. To bridge the generational gap, Oden and the research suggested:

• Leveraging text messages and video conferences to avoid looking outdated to Gen Z. 
• Keeping the dialogue going with quarterly and annual meetings to understand a client’s needs. For example, the survey found that 45% of clients cited tax planning as a service offered by their financial advisor, but only 28% of them value that feature.

“If you’re not talking to your clients, someone else will,” Oden said.

Married With Children. Though Gen Z often gets a bad rap for being more interested in TikTok accounts than retirement plans, they can be savvier than prior generations. The survey found that 48% of all respondents said they recognized potential conflicts of interests from advisors recommending proprietary products that may have been chosen for reasons other than being in clients’ best interest. Younger clients are more likely to distinguish those conflicts, the survey said.

The magic of Google is also helping them more easily understand financial markets, Oden said. “They question many things their parents took for granted.”