Here’s a startling fact: over the next 25 years, a staggering $120 trillion in wealth will change hands, passed down to the next generation. But here’s where it gets controversial—only 27% of future heirs plan to stick with their parents’ wealth advisors. Why does this matter? Because it’s not just about money; it’s about trust, relationships, and the future of family legacies. And this is the part most people miss: most wealthy benefactors don’t seem to mind if their heirs switch advisors. But why? Let’s dive in.
According to a survey by Cerulli Associates, which polled investors with at least $250,000 in assets, only about a quarter of beneficiaries—mostly widows and children—intend to keep their benefactor’s financial advisor. That number drops to 20% for those who’ve already inherited wealth. Surprising? Not really, once you understand the reasons behind it.
When asked why they’re moving on, half of the heirs surveyed said they already have their own advisor. Another 28% cited a lack of a personal relationship with their benefactor’s advisor. Only 14% said they didn’t want to work with any financial advisor, and just 10% felt the advisor didn’t meet their specific needs. The takeaway? It’s less about dissatisfaction and more about existing relationships and personal preferences.
John McKenna, a research analyst at Cerulli, explains it well: ‘If parents pass away in their 70s or 80s, their heirs are typically between 40 and 60. By then, they’ve often established their own wealth management relationships. They’re not starting from scratch; they’re adding to what they already have.’ In other words, it’s not a rejection of the legacy advisor—it’s just life moving forward.
Now, here’s another twist: benefactors themselves are surprisingly indifferent. While 26% hope their heirs will keep their advisor, over half say they’re unsure or leave the decision entirely to their beneficiaries. Only 7% actively discourage it, usually because there’s no pre-existing relationship. So, is this apathy, or is it trust in their heirs’ judgment?
The real issue, according to Scott Smith, senior director of advice relationships at Cerulli, is the lack of open communication. Even among investors with over $5 million in assets, 20% admit they plan to keep their estate details a secret until after they’re gone. And the reality is likely worse: 34% of high-net-worth heirs say they only learned the details after their benefactor’s death. Why does this matter? Because advisors often miss the chance to build relationships with the next generation, leaving heirs unprepared and advisors at risk of losing clients.
Smith puts it bluntly: ‘Benefactors think they’ll have these conversations before they die, but the next generation says they never happen.’ The result? Advisors are left scrambling to connect with heirs during emotionally charged times, making it harder to retain assets or provide support. So, whose responsibility is it to break the ice? Smith argues it’s up to advisors to nudge clients into having these uncomfortable but necessary talks.
Here’s the bottom line: it’s not just about retaining assets—it’s about ensuring heirs are prepared. As Smith says, ‘We’re trying to make it easier for your survivor when you pass.’ But here’s the question for you: Should advisors push harder for these conversations, or is it on families to take the lead? Let us know what you think in the comments—this is one debate that’s far from over.
