There is an old saying, often attributed to Confucius: “The best time to plant a tree is 20 years ago; the second-best time is right now!” For most advisors this is a painful reminder: on any given day there are hundreds of choices that can be made, but only a few that will produce real, long-term benefits.
The Built-in Challenge of Working with “Next Generation” Clients
A perfect example of this dynamic tension is how an advisor decides to work with “next generation” investors. There is no more important task for an advisor than keeping their current clients happy and engaged. Engaging the children and grandchildren of your best clients is of equal importance for the future, except for the problem that those efforts produce no real, immediate benefits today.
This decision-making vulnerability is built into the advisor’s role: there is always a tension between the immediate tasks that an advisor must do to stay in business and the strategic activities that the advisor can or should do to insure the long-term viability of their business. It is emotionally easy to respond to an urgent request from your biggest client. It is far more emotionally challenging to allocate time to building relationships that may not pay off for years—or even decades.
For every advisor, working with the top 10 clients in their business is an emotionally clear and obvious “must do.” These clients pay the bills and are highly desirable to other advisors. They represent a huge risk of loss. They are hard to find, and require time, effort and energy to keep. They are top of mind all the time.
But their children are not top of mind. Even when they are engaged with the business, they are often near the bottom of the lead advisor’s priority list. They have the potential to be important to the advisor in the future, but they do not represent a must-do today. That is why many next-generation clients say they have not met with their parents' advisor. And, in cases where they have met a member of the advisor’s team, they are working with a junior associate. It is hard for the business to see these “clients” as important when there are so many more immediate tasks at hand that have short-term consequences.
It’s no wonder that a 2024 survey1 from Dynasty Financial Partners found that only 34% of children stay with their parents’ advisor.
Demographics Don’t Lie
Surprisingly, solving the problem of “next gen” clients has been only slowly growing in importance over the past decade. Getting through to busy advisors requires a big breakthrough. In 2026, the oldest Baby Boomer turns 80, which will be followed by over 70 million people in this generation entering the last years of their life. Their children make up “Generation X,” who started turning 60 in 2025. In a very important way, the future is finally “now” when it comes to the big wealth transfer we have been waiting for.
The other catalyst of awareness is that many advisors have sold their businesses or are in the process of seeking a sale. The stability of the asset base of the financial-services business has become critically important, and fallen under intense scrutiny. For both the seller and the buyer, the next generation is the value of the business. As a result, the process of selling or buying a business stretches the timeline of both types of advisors into the future. From this new point of view, the next-gen client becomes an urgent priority.
Most advisors will not like what they see. According to a recent survey from Capgemini, 81% of next-generation clients who are set to inherit significant wealth report that they have already decided to replace their parent’s wealth-management firm.2 This makes psychological sense; children grow up, leave home and prefer to make their own choices. The oldest Gen X client turns 61 this year; in most cases they have been living independently on their own for a long time.
The same study reveals that the industry is not well prepared for this challenge: 58% of financial-services executives admitted that it is “challenging” to build relationships with the next generation. Gen Xers have a very different value system from Baby Boomers when it comes to their investing, priorities and lifestyles.
When Should You Engage the Next Generation?
The best time was 20 years ago, when your Baby Boomer clients were in their prime and their children were young. The second-best time? Right now, before you must scramble because a major life event has redefined the relationship between you and your best clients.
Importantly, the question is no longer “when,” but “how”? Getting an introduction to the 50- or 60-year-old children of your top 10 clients does not represent success. Generation X values meaningful experiences, and needs to feel deeply understood.
You will need a process that leads to a deep engagement and working relationship with all the children who will inherit your clients’ wealth.
Featured Webcast
While this is easier said than done, the Advisor Institute is here to help. Join our quarterly business-management webcast, “Solving the Advisor’s Biggest Challenge Today: Engaging the Next-Gen Investor,” on Wednesday, March 25th for key insights, practical guidance and an executable model to follow.
The views expressed herein do not constitute research, investment advice or trade recommendations, do not necessarily represent the views of all AB portfolio-management teams and are subject to change over time.
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