Big challenge for advisers: Helping millennials with inheritances

The coming huge transfer of assets between baby boomers and their millennial children will present a huge challenge for financial advisers.

In the next three to four decades, the millennial generation is expected to receive more than an estimated $30 trillion from their boomer parents, according to a recent report, “The Greater Wealth Transfer: Capitalizing on the Intergenerational Shift in Wealth,” by Accenture.

Between 2030 and 2045, Accenture predicts, 10% of the total wealth in the United States will change hands every five years.

According to Accenture, advisory firms must maintain a relationship with heirs by earning their long-term loyalty and trust in order to handle these enormous transfers. But with the average adviser over 49 and contemplating retirement, many may not be looking to build relationships with their clients’ children.

Additionally, the financial behavior of this new generation may not match that of their parents, and advisers will have to adjust to this change.

In the report, Accenture suggests that advisers increase client engagement on estate planning, drawing in young advisers, making deliberate plans to help clients navigate their inheritances and impressing heirs with different models.

Not only will an adviser without a plan lose an heir as a client, but the value of the adviser’s business may diminish.

About 17% of boomers already had inherited $2.4 trillion by 2007, while the remaining boomers stand to inherit about $6 trillion more, according to a recent MetLife Inc. study. Past studies have predicted that between 1998 and 2052, a total of $41 trillion would be exchanged among the different generations.