If you love something, let it go, the old saying goes … but an advisor probably didn’t come up with that.

The Great Wealth Transfer is already upon us, and while it’s debatable exactly how much money will change hands over the next quarter of a century, most agree it is at least in the tens of trillions. Market researcher Capgemini estimates that $84 trillion will transfer to inheritors over the next 23 years. Additionally, the world’s millionaire population increased by 600,000 last year — 94% of whom were in the US.

That’s good news for older clients’ children, but the concern for advisors is that the vast majority of next-gen high net worth clients — 81% — will switch from their parents’ wealth manager within two years after receiving their inheritance, according to Capgemini’s latest World Wealth Report. Advisors are recognizing that what worked for a client might not work for their kids, who often want more aggressive investment strategies in their portfolios and access to digital interfaces with their wealth managers.

“The attrition rate should be a wake-up call for the industry,” said Kyle DePaolo, co-founder of DePaolo & May Strategic Wealth. “Too many advisors focus solely on the primary wealth holder and neglect building trust and relevance with the next generation.”

The Kids are Alright

While 81% does sound like a lot, it’s not surprising that clients and their younger children would have different financial concerns and goals. While baby boomers are focused on wealth preservation, next-gen HNW clients are predominantly risk-takers, interested in assets such as private equity and cryptocurrency, the report found:

• Next-gen HNW clients look for comprehensive financial planning, or concierge service, and they seek out wealth managers who can advise on everything from portfolio management, to travel, to education, the report found.
• Younger clients also want an advisor they can seamlessly communicate with via multiple channels including phone calls, emails, and digital platforms. They have a strong preference for video calls.

“Firms that can successfully integrate digital-first services and enhance omnichannel experiences will have the upper hand in retaining, attracting, and delighting this population,” according to Capgemini.

What Women Want. One thing to keep in mind is that before clients’ children receive their inheritances, assets are often transferred to wives first as women tend to live longer than men. “They also are likely to make a change in advisors if the current advisor has not been engaging and addressing her,” said Lisa Kirchenbauer, senior advisor at Omega Wealth Management.

It’s beginning to look a lot like layoffs in the Northeast.

Goldman Sachs, JPMorgan, and Morgan Stanley are set to fire hundreds of workers from their New York City and New Jersey offices later this month, according to filings in those states. The downsizes run the gamut from 3% to 5% of the global workforce for Goldman Sachs to potentially 2,000 roles for Morgan Stanley, according to a March report from Bloomberg. The dismissals are the latest in a series of corporate layoffs across most major US banks — affecting both advisors and higher-level executives — and are in line with annual workforce strategies. Wirehouses are known to routinely trim staff to make way for new recruits.

“We regularly review our business needs and adjust our staffing accordingly — creating new roles where we see the need or reducing positions when appropriate,” said a JPMorgan Chase spokesperson. “Our strategy has not changed, and we run the company to invest through the cycle.”

Tough to Be a Banker

The last major series of bank layoffs was in 2023, when the major wirehouses — with the exception of JPMorgan Chase — laid off a combined 20,000 workers. Goldman, which cuts 3% to 5% of its workforce annually, reportedly cut 5% of its workforce that year, and Morgan Stanley cut 2%. Last calendar year wasn’t much better, with additional cuts at the beginning of 2024.

Morgan Stanley’s CEO told CNBC at the time that one major reason for the layoffs was a lack of attrition, as job-hopping slowed that year. Other reasons for the ongoing restructuring include broader stock market weakness following President Trump’s tariffs, and a rise in the use of AI, which may soon make certain back-office roles obsolete. The dismissals include:

• Goldman Sachs firing 310 workers from its New York City headquarters starting June 22.
• Morgan Stanley cutting 230 jobs, excluding financial advisers, from seven of its New York offices starting June 17.
• JPMorgan Chase terminating 145 people from its New Jersey locations starting June 23.

“We are committed to New Jersey and have more than 12,000 employees working in the state with more than 575 open positions,” the JPMorganChase spokesperson told Advisor Upside, adding that the company is complying with new amendments to the WARN Act in the state, which requires employers to report layoffs that impact 50 or more employees.

Old News. The Goldman cuts are taking place in the spring this year, as opposed to the second half of the year, and will target VPs, according to The Wall Street Journal. The moves are “part of the same talent exercise that was widely reported on earlier this year,” a Goldman Sachs spokesperson said via email. “There is nothing new about this.”

Tech analyst Dan Ives believes he has identified the most important companies driving artificial intelligence innovation today.

He and Wedbush Fund Advisors launched the firm’s inaugural ETF Wednesday — the Dan Ives Wedbush AI Revolution ETF (IVES). The fund, based on Ives’ proprietary research, targets companies leading the charge in robotics, semiconductor chips, retail products, and of course, AI. It’s the old California gold rush “picks and shovels” strategy. “AI isn’t just about the Mag 7,” Ives told Advisor Upside. “It’s the software, the consumer, the infrastructure, the cybersecurity players.” The fund had net assets of more than $26 million as of Wednesday, an expense ratio of 0.75%, and a net asset value of $25.35.

AI is likely going to be as monumental as the printing press or the internet, but do advisors have much enthusiasm for products that specifically target the sector?

Read more.