Estate Planning for Gen X and Y: Attracting and Retaining Clients

The young are getting richer. This may be happening for two reasons. First, wealthy parents are no longer waiting until their death to transfer wealth; they are making transfers during their lifetime. Second, the technology boom has resulted in many IPO’s, creating higher wealth at younger ages than we've experienced before.

In the past, advisors focused their practices on Baby Boomers, ignoring Gen X and Y investors. This happened to not be the case anymore. When combined, Gen X and Gen Y have overtaken Baby Boomers as the wealthiest generations in history. Here is the breakdown:

• Baby Boomers (born 1946 – 1964): 76.7 million
• Gen X (born 1965 – 1976): 49.1 million
• Gen Y (born 1977 – 2000): 77 million

Create Relationships

According to a study conducted by Pershing, 90% of heirs say they will move their assets to another investment firm once they receive their inheritance. This can cause a problem for advisors who hope to retain their current clients' assets after it is passed on. In order for the clients' heir to see you as "their" advisor, you'll need to create a relationship. This way when the wealth is transferred they won't see you as just their parent's advisors. The best way to bring heirs into the fold is through introductions from their parents. Due to the generation gap, some parents have difficulty talking to their heirs about their financial situations, wishes, and concerns. As their advisor, you are in a unique position to create an environment that fosters healthy financial conversations. You can include the heirs in the meeting with their parents to discuss investment and estate planning for Gen X and Y. The heirs should rely on you to be a resource to help manage their own assets and inheritance. You will need to build a strong relationship with them by the time they need help. One way to do this is by becoming their educational resource on all financial related issues. These areas might include trust services or when other advisors lack expertise. In order to educate both parents and heirs about trusts, explain they help to accomplish their wealth transfer goals. They also will protect heirs from future creditor claims. This will help establish the foundation for you to earn the trust of Gen X and Y heirs and retain assets under management.

Advise Generation X and Y

According to an article published in onwallstreet a recent survey of 642 high net worth and ultra-high net worth investors, defined as those having 3 million in liquid assets in addition to what they have already invested, revealed that:The majority of survey participants had some kind of estate plan in place. However, many wealthy individuals, especially Gen X and Gen Y, do not have a trust;

• Only 51% of survey respondents had a revocable trust and only 22% had an irrevocable trust
• 43% of respondents believed that outlining their wants in a will replaced the need for a trust and another 31% were procrastinating
• Respondents did not have trusts because of “misunderstanding and lack of professional guidance.”

Also according to survey results, 43% of respondents believed that outlining their wants in a will replaced the need for a trust. Another 31% were procrastinating, while 17% didn’t think they had enough money for a trust. The survey results highlight that there is a huge opening for advisors to offer advanced estate planning for Gen X and Y heirs and the Baby Boomers. By educating your clients about all of the estate planning options for transferring their wealth to Gen X and Gen Y heirs, including the facts about how to use Trusts as an essential part of an estate plan, you position yourself as a trusted expert and build a long-lasting relationship for multiple generations.

Premier Trust Can Help

Premier Trust is a Nevada chartered trust company providing independent administrative trustee services to our clients all across this great nation who want to benefit from the Nevada Advantage; Nevada’s favorable trust, corporate, asset protection and tax laws. Good financial strategies start with a dream and a plan. Whether you or your clients are looking for high-end estate planning, basic trust services or want to invest in non-traditional assets within an IRA, Premier Trust offers the cost-effective, creative, flexible administrative solutions for dreams of any size and situation with a full line of personalized trust, IRA and estate settlement services. Learn more at www.premiertrust.com Download the Printable Version