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Great expectations. Those two words express the sentiments of many advisors who anticipate serving the grown children of their high-net-worth Boomer clients—and holding as AUM the wealth they helped their clients build—when the children inherit mom and dad's wealth. Unfortunately, counselors' hopes of serving HNW families for more than a single generation are often dashed against the rocks of today's realities.

What is happening and what can advisors do to change course?

The stark reality is that most counselors do not form personal relationships with the grown children of older HNW clients while mom and dad are still alive. A simple reason may be geography, as many of today's retirees and retirees do not live near their grown children, making lively intergenerational gatherings more difficult and counselors perhaps less inclined to approach. However, a much bigger reason is that grown children probably perceive their parents' counselor as good for mom and dad, but either uninterested in them, unable to deal with their problems, or just too old-fashioned. old and expensive.

The truth, of course, is that most advisors can address the financial and investment concerns of investors of all ages, because our research has found that they all worry about the same things to about the same degree: having money enough for retirement. , investment returns, tax minimization, inflation, health care and estate planning.

What is different is that the mindsets, information habits and delivery preferences of the grown children of older customers are usually very different from their parents, whether the children are GenX (44-59 years old), Millennials (28-43) , or older members of GenZ (12-27), and whether they are HNWs themselves or on the journey to that status. As a result, if they want help with their financial challenges—whether it's investments, budgeting for a child's college education, paying off college loans, saving to buy a home, or understanding 401(k) choices at a job first – younger age groups approach financial advice differently.

For them, going online is the first (and often the last) step. For example, our research on HNW investors shows that 77% of affluent millennials consider their financial knowledge to be “very good” or “excellent,” compared to just 41% of Boomers and 39% of GenXers, perhaps because Millennials were the first generation to grow up with the Internet , giving them more immediate and widely available access to information than any previous generation. With so many financial education tools at their disposal, perhaps it should be no surprise that Millennials feel the way they do about their financial knowledge or why 59% of them said they don't think they would hire a financial professional, saying that prefer to handle work on their own and are confident in their ability to do so.

Additionally, 27% cited cost as a factor that would prevent them from hiring an advisor. When asked to state in dollar terms what they would expect to pay annually for an advisor, 72% said they would pay less than $5,000 a year—half of what many advisors would estimate to manage 1 million dollars in assets, based on 1. % AUM fee.

In short, advisors who approach the grown children of older clients—let's call them ACs—with the same service model and value proposition that satisfies their parents are likely to find that their efforts fall largely on deaf ears Focusing on the financial issues that customer ACs are facing and providing solutions in a customer-centric and cost-effective manner is the way to attract and retain these next-generation customers. Here are some suggestions:

• Shine a light on non-investment areas. Most ACs know that financial advisors handle investments. They may not be aware of the extent of services offered, such as tax planning or insurance advice, for example. While 44% of advisors in our survey offer estate planning, for example, only 31% of younger and older HNW clients say they engage with an advisor for that service. Surprisingly, 45% of Millennials surveyed want help with estate planning, compared to 29% of Boomers. Why not conduct a 60-minute estate planning review session, or a similar session on another non-investment related topic, and offer it as a value-added benefit to Boomer clients and ACs theirs, regardless of whether the latter are clients, their advisor, or are self-made.
• Create an additional level of service. For many younger potential clients who want investment advice—often with greater participation in the process and greater interest in a greater variety of investments than their parents—the current AUM fee model may be fine. But for those who need more planning help and little or no investment advice, a subscription, project or hourly fee model may be more appealing. The service can be provided by financial planners or pre-planners supported by software that clients can engage with. While the revenue from this level of service will be lower, so will the costs, however the agreement lays the foundation for long-term relationships that can evolve into traditional AUM arrangements.
• Focus on them, not on you. Before you try to get in front of ACs to show them what you do, how about observing them to learn about their financial challenges so you better know if what you're selling is what they are interested in buying? You can use the survey findings to shape your alternative service level offering, as well as create content that demonstrates how you understand the needs of younger investors. Once the alternative service is available, you may consider offering it to current customer ACs as a free one-year subscription in recognition of their parents' loyalty and your firm's commitment to their multi-generational family's financial well-being.
• Change your presence on social networks and on the web. Communicating how you serve the needs of different generations is the next step. Consider investing more in the content on your website. This content should demonstrate your subject matter expertise in ways that help clients and potential clients understand the issues they care about—different types of investments, taxes, budgeting, saving for college, etc.

For advisors with older HNW clients, the reality is that these clients as well as their grown children can benefit from your advice. Being aware of the differences in how those grown children approach financial advice and modifying the way you and your firm deliver that advice is key to unlocking the door to serving them.

_{The information, analysis and opinions expressed herein are for informational purposes only and do not necessarily reflect the views of Envestnet. These views reflect the judgment of the author as of the date of writing and are subject to change at any time without notice. Nothing contained in this section is intended to constitute legal, tax, accounting, securities or investment advice, nor an opinion regarding the suitability of any investment, nor a solicitation of any kind. Intended for investment professionals only.}