Close to half of financial advisers (46%) believe the ‘great wealth transfer’ poses an existential threat to their business, according to research from Natixis Investment Managers.
The asset manager surveyed 2,700 professionals across 20 countries to compile the Natixis Investment Managers’ 2024 Financial Professionals survey.
Natixis estimates $84trn worth of assets are set to pass from one generation to the next over the next 20 years.
Other key findings from the survey included 43% of respondents saying they are worried they will not retain assets passed on to clients’ spouses or children, and one-third (33%) saying they have already lost significant assets through ‘generational attrition’.
Advisers reported retaining client relationships 72% of the time on average when a spouse inherits. When clients’ children inherit, they retain the assets only half of the time (50%).
Despite these widespread concerns over losing clients following wealth transfers, the advisers questioned said they anticipate an average of 11.5% growth in assets over the next year.
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In terms of increasing retention, eight in 10 advice professionals (82%) said they regular discuss family wealth planning with clients and offer a range of ancillary services including trusts and estate planning (54%) personalised services such as career advice and networking (47%) and consolidating managed accounts (30%).
Those participating were also asked for their views on adding private assets to client portfolios. Two thirds (65%) said it is ‘still difficult to build a portfolio of private assets at scale’.
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Darren Pilbeam, head of UK sales at Natixis IM, said: “Over the past five years markets have delivered swift downturns and record highs, inflation spiked to its highest in 40-years, and interest rates shot from near zero to 5% or more.
“Although change may not always be as dramatic, advisers have been mastering the art of managing portfolios through turbulence and must continue to adapt to the speed and frequency of changing macro and market factors. Of all the challenges facing advisers however, keeping current assets on the book is the most critical.
“Advisers now need to flex their strategies even more to appeal to the next generation of investors. Finding more time to deepen relationships with clients and financial planning service offerings will be crucial to the success of their businesses in the long run.”
