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Research points to looming client retention issue for advisers

Miranda Brownlee
08 March 2016 — 1 minute read

Advisers and their clients are largely unprepared for the transfer of wealth across generations, as 80 per cent of investors plan to transfer wealth but only 45 per cent have a plan in place, according to a recent State Street white paper.

The white paper, titled Managing the Transition of Wealth Across Generations, is based on a survey of 400 financial advisers, 560 individual investors and a range of industry experts during the first quarter of 2015.

According to the white paper, US$12 trillion in assets has already changed hands in the form of inheritances from the Silent Generation to the Baby Boomers.


The research also predicts that between 2011 and 2048, baby boomers are expected to transfer between $US30 trillion and $US41 trillion to Generation X and Millennials.

For many advisers, this transfer of wealth will represent an opportunity to build their client base, but for others, the white paper warned, it could mean a loss of assets and a direct hit to their bottom line.

“Many investors do not keep the same financial professional when navigating life changes, such as a death in the family,” said the white paper.

The research found that only 38 per cent of investors retain the same advisers when their spouse dies. This number is even lower when children lose their parents and inherit assets, dropping down to just 29 per cent.

While the white paper said the industry has done a good job of focusing on prudent financial wealth management, it said it has been less diligent when it comes to helping investors be more comfortable talking openly about wealth.

The survey that found in the US only four per cent of families have regular meetings to discuss money matters, while 45 per cent of families said wealth is never openly discussed.

One of the main problems is that clients don’t want to think about the transfer of wealth before a significant event happens, according to the research.

“When assessing the primary triggers for thinking about the wealth transfer planning process, investors are more inclined to be reactive rather than proactive,” said the white paper.

More than a third or 37 per cent wait until they reach a certain age before implementing a plan.

“This trigger – or when there is a death or health issue – is often the moment when they become ready to involve their financial advisor in the process. Unfortunately, at this stage, it often can be too late for meaningful action,” said the white paper.

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Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Research points to looming client retention issue for advisers
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