Ultra-High-Net-Worth (UHNW) Millennials, whom we define as coming from families with a net worth of at least $35 million, stand at the cusp of the largest intergenerational wealth transfer in North American history.1 When their inheritance eventually comes, this generation will be just as eager to work with advisors in managing the family wealth as their Baby Boomer parents and grandparents were.
We partnered with Campden Wealth to produce Proving Worth, the first study to examine the needs and intentions of the next generation of wealthy families. Here are four key takeaways from the report on how UHNW Millennials seek to work with advisors.
- They want advisors to focus on wealth transfer, deal sourcing and to provide advice on familial conflict resolution.
- This generation of wealth holders desires frequent contact with advisors, both in person and online.
- There is a considerable disconnect between the services advisors are now providing and the services UHNW Millennials want.
- They have zero interest in the concierge and estate management services that are so popular with their parents and grandparents.
The data tells a clear story. Wealth transfer is the service that UHNW Millennials want most; with 90% of the young adults we surveyed rating it as either important or very important.2 They told us aggregated reporting is the second-most important service that an advisor can provide; with 88% saying it is either important or very important.
Deal-flow and due diligence on high-potential investing opportunities is the third-most important service an advisor can provide, the survey revealed. One UHNW Millennial we surveyed said: “Deal flow is crucial. I’m always looking for new ways to invest and I expect my advisors to be keyed in to the freshest opportunities.”
How Advisors Can Retain Their Clients’ Millennial Children/Grandchildren
Successful advisors to the UHNW community have spent years cultivating relationships with their clients. But when those clients pass away, we’ve found that most advisors are at risk of being replaced by next-generation wealth holders. As noted in the chart below, advisor attrition is high among UHNW families. This is often due to advisors only having relationships with the primary decision-maker within a family, and not the spouse or children.
When new decision-makers take control of the family wealth, they want to turn to an advisor they know and trust. Here are three crucial steps advisors can take to keep the next generation in the fold:
- Create an org chart of your client’s family and grade your relationship with each person on a scale of 1-10. Focus on strengthening the relationships that received the lowest scores.
- In cultivating relationships with UHNW Millennials, don’t just focus on asset management. Get to know them holistically.
- Remember that just a little bit of positive interaction goes a long way in relationship building.
For additional insights, take an interactive look at how wealthy Millennials approach investing, or read our research paper: “Wealthy Millennials: A Generation Seeking the Right Advice.”
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2 A total of 32 Millennial wealth holders engaged in a quantitative survey that was conducted by Campden Wealth, with analysis and aggregation taking place in September and October 2015.
3 Source: Proving Worth: The Values of Affluent Millennials in North America
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These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.