The Great Wealth Transfer keeps getting greater

Stephen Lamb [00:00:00] Hello and welcome to By The Numbers, I’m your host, Steve Lamb. Today, we’re looking at the great wealth transfer, thanks to the power of compounding the coming multigenerational wealth transfer continues to swell as an opportunity for enterprising financial advisors. But how or if advisors will ever capture that mountain of assets as it passes to the next generations remains a subject of constant debate. This powerful bull market we’ve been living in for quite some time now has dramatically changed and increased the amount set to transfer. In 2018 Cerulli Associates estimated that there would be sixty eight trillion dollars shifted between the baby boomer generation and their heirs. Back in 2011, that number was estimated at a mere 38 trillion. And now, according to the latest analysis from Cerulli, a whopping eighty four point four trillion dollars worth of assets will be transferred through estates over the next two dozen years. About 12 trillion of that will be donated to charity, but more than 53 trillion will be transferred from boomer households. That’s a lot of hooch. In 2019, the entire global GDP was pegged at $86 billion. 

Devin McGinley [00:01:15] The takeaway for advisers? Pay attention to the children of boomers, as Tracy Horton, a Cerulli analyst, told us. It’s not just kids in their 20s we’re talking about people in their 50s will be receiving more money than anyone else through this great wealth transfer. Horton says the winners of wallet share will need to be prepared for changes to their business model and open to evolving with the needs of a younger demographic. According to the Cerulli research, family meetings and regular communication are considered the most effective wealth transfer planning strategy by 81 percent of high net worth practices, followed by educational support with 59 percent and organized succession planning 31 percent. To improve relationships across generations Cerulli recommends making family advance a regular part of the advisory process. 

Stephen Lamb [00:02:02] With so much money changing hands in advisers are sure to want to earn their fair share of business from this ever growing pie. But it won’t happen on its own. They’ll need to be proactive and go earn it. Tune in next week for a look at our annual Best Places to Work awards. Thanks for watching By The Numbers.