By Ziad Mabsout, Co-Founder and CEO of Vennre
The Great Wealth Transfer is usually discussed as a question of scale. UBS estimates that more than $83 trillion will change hands globally over the next 20 to 25 years, with the majority passing between generations. For wealth managers, however, the more immediate question is where that money goes next.
An inheritance does not automatically bring the recipient into the same relationship their parents had with a private bank, adviser or wealth manager. There can also be a generational gap between an heir and the advisers who have spent years working with their parents. The recipient may already have their own investment preferences, financial habits and trusted providers. That makes inheritance a retention event as much as a transfer event.
There are already signs of how fluid these relationships are becoming. 45% of wealthy clients plan to move up to half of their assets away from their current wealth manager. Clients also use more than two advisers on average, meaning wealth can move without the relationship disappearing altogether.
For the next generation of wealth holders, the reasons for switching can also be very personal. Research has found that younger inheritors considering leaving a benefactor’s adviser pointed to differences in investment philosophy, misaligned values, lack of trust and, in some cases, simply not knowing the adviser personally. Their expectations around technology and digital access may also differ from those of the previous generation.
The implication is simple: a relationship with the family is not necessarily a relationship with the heir.
The relationship starts before the succession
Much of wealth management is still organised around the point at which someone has already gathered enough assets to qualify for a particular service. But wealth creation is a journey, not a threshold.
High-earning professionals may spend years building wealth before reaching traditional private-banking thresholds. During that time, they are already making investment decisions, trying different platforms and deciding where they feel comfortable taking advice. Those decisions are also where financial relationships begin to form.
That matters when succession eventually takes place. If the first meaningful conversation with the next generation happens once an inheritance is already being transferred, the adviser may be entering a relationship that someone else has spent years building.
Younger wealth holders are also more mobile. Careers, families and assets increasingly span different markets, while digital platforms have made it easier to maintain financial relationships without being tied to one location.
For wealth managers, that changes the assumptions behind long-standing client relationships. The next generation may live in another country, use different financial institutions and approach investment decisions differently from their parents.
What the next generation expects
None of this means younger inheritors will automatically leave their parents’ advisers. Some will stay, particularly where the adviser has already built a direct relationship with them.
What has changed is that the existing relationship can no longer be taken for granted. Younger clients have more ways to access financial information, compare providers and manage parts of their wealth independently. They may still value professional advice, but they are less reliant on a single institution for everything.
This is also where the distribution model for wealth is changing. WealthTech platforms can build relationships with high-earning professionals while they are still building wealth, rather than waiting until they meet a private-banking threshold or receive an inheritance.
By combining digital access with investment opportunities that were historically harder for individual investors to reach, these platforms can become part of someone’s financial life much earlier. By the time wealth is transferred, an entirely separate relationship may already have been built.
The Great Wealth Transfer will move an enormous amount of capital between generations. For wealth managers, the real test will be whether the relationship moves with it.
