The data and analytics company’s report, 2019: Trends to Watch in Global Wealth Management, said that, although involving the next generation during the estate planning process is the most effective retention tool, around 59 per cent of wealth managers across the world offer inheritance planning services directly.
Involving clients’ children was found to minimise the risk of losing their business by 24.2 per cent, followed by encouraging clients to involve the next generation in the financial decision-making process at 21.6 per cent.
Internships and work experience at the wealth manager contributed to minimising the risk by 11.1 per cent while a strong portfolio performance helped decrease the threat by 11 per cent.
“Reaching out to the next generation early on is critical, but wealth managers are not doing a good job,” Heike van den Hoevel, senior wealth analyst for GlobalData, said.
“Of course, discussing one’s mortality is a subject many would rather avoid.
“But if providers fail to ensure the continuation of the relationship with successors, this will amount to a significant chunk of their current business being lost.”
The report also noted that 38 per cent of the global HNW population is above the age of 60, equating to 4.3 million individuals.
The study was based on a survey of 358 wealth managers internationally.
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
