As One Generation Moves On, Financial Advisers Try to Get to Know the Next One


Times are changing in the financial services industry because of what is being called the greatest multi-generational wealth transfer in American history.

The Center on Wealth and Philanthropy at Boston College estimates that $59 trillion ? divided among heirs, charities, estate taxes and estate closing costs ? will be transferred from 93.6 million American estates between 2007 and 2061.

Financial advisers across the country stand the risk of losing substantial business when older generations die. The younger generations may decide to take their money management business to other firms.

That?s why businesses like Waldron Private Wealth, a Bridgeville, Pa., based investment advising firm that manages $1.5 billion for about 150 clients, are taking on new roles in family money conversations.

About five years ago, Waldron started a program to open the lines of communication between parents who want their children to live productive lives and children who needed to understand the weight of responsibility that comes with inherited wealth.

The program also gave advisers a chance to get to know the children by including them in family conversations about money and offering to help them with their personal finances.

A 2015 report by Accenture, a multinational consulting services company, found that many firms aren?t prepared for the intergenerational shift, especially in presenting services the next generation wants. ?Wealth management firms face a two-part challenge: retaining the loyalty and the assets of the boomers, while also developing a value proposition that is relevant to the next generation of inheritors,? the report said.

Relationship building doesn?t stop with chats about stocks and bonds, if Pittsburgh-area firms are any measure.

?Oftentimes when kids are finishing up either high school or some sort of post-secondary education, we are working with them on creating a budget, buying a house or making decisions on their benefits if they have benefits,? said Matt Helfrich, president of Waldron Private Wealth.

Jobs are important, too. ?We?ve worked with them on writing resumes and we?ve helped with getting letters of recommendation,? he said.

Aaron Leaman, chief investment officer at Signature Financial Planning, said his company?s advisers make a special effort to get to know and interact with the children of clients.

The firm also facilitates family meetings.

?Just like talking about sex, parents are sometimes afraid to talk to their children about money as far as how much they have and what they plan to do with it,? Leaman said.

?We bring all generations together in a room and have an open honest conversation about all the financial issues in a place where everyone can feel safe and professional advice is there at the table.?

Paul Brahim, CEO of BPU Investment Management, said that for about the past 10 years, advisers at his firm have been encouraging clients to include their children in the estate planning process. The goal to help the children understand the parents? values around money, as well as the mechanics of asset management and wealth transfer.

?We heard the concerns of parents,? Brahim said. ?They worked a lifetime to accumulate their assets and they were worried that a lifetime of work would be quickly wasted if their children didn?t learn money management.

?Also, by engaging in the financial planning process with the adult children, we can help the parents align their estate plan with their children?s life goals.?

Waldron has set itself up to have a workforce that can relate to the generation in the 25 to 35 age group. Helfrich, who started 15 years ago at the firm as an intern, is 36. Advisers who meet with clients range from age 25 to 58.

Helfrich said an interesting dynamic occurs when a group of typically guarded and very private clients meet with others like themselves for a discussion about their children and their money.

?They start talking and everyone realizes these issues are not unique,? he said.