The changing preferences of next-gen clients: Planning

Understanding the need to have the proper structure, asset and people in place, how do you then connect them all in a cohesive manner and how do you approach it with a client who may not be even thinking about it? Planning for the changing preferences of next-gen clients is the key here. 

How to approach planning with a client is often more of an art than science. What we have found to work is to deploy active listening for the inflection points in a client’s life. Is there a birth of a grandchild? Is there a child getting married? Are the clients about to retire or thinking seriously about stepping back from the business? Has there been a divorce? Perhaps, a recent very relevant topic — how should I care for my health and family during this pandemic? While these “life moments” are top of mind, that is the time Advisers should seize the opportunity to engage the client in meaningful discussions and engagement on this topic. 

Another planning item that often resonates with multigenerational families is education for the next generation. Multigenerational educational programs can create family learning opportunities that promote the responsibilities of managing wealth. It begins with establishing open channels of communication that help all family members feel engaged in the process and able to contribute to the family’s decision making.

By providing financial education and more open dialogue among family members, sharing the family’s wealth transfer and other succession plans becomes a more comfortable and accessible conversation. Many wealth management firms have created dedicated teams for this specific reason, offering workshops, online educational tools, and other resources. The adviser that can take this burden off the senior members of the family can add value to their relationships for this often overlooked but critical area of wealth planning. 

We have found that oftentimes, offering to do a workshop or a primer on investments or budgeting for the younger generation is a great way to add value to a long-term relationship. Another approach that we have seen add value is to help the next generation plan early, in advance (and perhaps in anticipation) of the inheritance. Does the next generation have his/her own estate plan? If a trust provides that the next generation receives a distribution at age 30, is this next generation prepared and budgeted for such distribution? These conversations well in advance of the actual “event” are all great ways for the advisers to start to build a relationship with their future clients. 

Lastly, philanthropy is another theme that resonates with the next generation of wealth holders. Many of these children grew up in households where philanthropy was a significant part of the family’s life, so it’s not a foreign concept. However, it’s important to avoid making philanthropic decisions without including the family in the process; in some respects, multigenerational philanthropy is defined by what it is not.

It is not the senior generation showing younger generations how to engage in philanthropy. Rather, it is the family acting together collaboratively on philanthropy that engages the family as a whole. Family philanthropy can be hard work but is also immensely rewarding. When a family takes the time to work together to identify its philanthropic goals and to collaborate on where, when and how to give, it can create a meaningful philanthropic legacy for multiple generations. Again, many firms offer comprehensive philanthropic planning services, which are particularly helpful when families have complex needs and require sophisticated charitable giving solutions that incorporate family involvement and tax minimization strategies. Another positive way for Advisers to offer truly integrated services.


Finally, the traditional methods of client communications are largely gone, and gone for good. Nowadays clients can typically access basic information in which they are interested without speaking to their adviser or having a traditional meeting. Furthermore, clients want and expect to be able to get the information in which they are interested via online access on their own at any time of the day or week. Having a digital client platform is table stakes, and the wealth management industry need to move faster to satisfy client demand.

Importantly, advisers need to recognize that they can no longer rely on traditional touch points to interact with clients and must adapt to a different type of engagement. Interactions with clients should add value beyond a traditional portfolio or plan review. Increasingly client engagement may revolve around exclusivity or access to information or experiences. And these experiences will generally need to be aligned with the changing preferences of the next generation. The unprecedented pivot to virtual interactions required by the COVID-19 pandemic has shown the industry how much client engagement can change, and it has only just begun. 

The wealth management industry is rapidly changing and advisers who do not recognize that, or who will not adapt to the changes, will likely be left behind. This next generation of clients expect, want, and demand different things, and the pandemic is accelerating it. Advisers would be wise to use the current “downtime” to take a hard look at their business and prepare for this accelerated new normal. 

Alvina Lo is chief wealth strategist and senior vice president at Wilmington Trust and Stephanie Luedke is head of private wealth management at Neuberger Berman.

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