Don’t assume your clients’ children will retain you

A quiet shift is happening in financial services, and many firms are underestimating it. The next generation of clients is not automatically staying with their parents’ advisors. In fact, four out of five (81%) of Millennials and GenZers are set to inherit wealth from their family’s plan to replace their parents’ wealth management firms, according to a new study from Capgemini’s World Wealth Report.

That should be a wakeup call when you consider that more than $120 trillion in wealth will be passed down to inheritors.
 
In a recent conversation on my podcast, EY’s behavioral science and simulation leader Sameer Munshi shared research that highlights the gap between what people say and what they actually do. In a recent study co-coauthored by Munshi, 82% of heirs said they would keep their parents’ advisor. But AI simulation predicted retention closer to 43%, and real-world industry data shows only about 20% to 30% actually do. 

That striking gap suggests that loyalty is not inherited. It has to be earned. And increasingly, it is being earned not through portfolio performance alone, but through better client conversations with NextGen. 

For decades, financial advice was defined by technical expertise. Advisors built retirement projections. CPAs optimized tax strategies. Financial plans were built around spreadsheets, assumptions, and models. Those skills remain essential. But increasingly, the most meaningful value advisors provide happens outside the spreadsheet.
 
Millennials and GenZers want to be involved earlier than previous generations in family wealth conversations, and they want more transparency about how various accounts and trusts work and whether the so-called “family values” align with their values.   

Young people today are asking deeper questions: 

• What does financial security actually mean for my life? 
• What kind of legacy do I want to create? 
• How should money support my family, career and personal goals? 

These are not purely financial questions. They are life questions. And the worst thing you can do is keep your clients’ young adult children in the dark. 

Helping potential young clients answer life questions requires advisors to expand their role beyond transactions and into something more meaningful: helping clients gain clarity about what truly matters. 

The rise of the transformation economy 

In a recent conversation on my podcast, author and business strategist Joe Pine described how the economy itself has evolved through several stages. 

It began with commodities, moved to goods, then services, and later experiences. Today, Pine argues, we are entering what he calls the Transformation Economy. 

In this new stage, people are not just paying for services or experiences. They are investing in becoming a better version of themselves. 

Experiences may engage us, Pine explains, but transformations change us. 

Financial planning fits naturally into this shift. 

A well-designed financial plan might create a good client experience, but the real value of planning often emerges when clients experience a deeper shift: greater clarity, improved decision-making or a healthier relationship with money. 

• When a client finally feels confident enough to retire.
• When a family aligns around shared financial goals.
• When someone stops reacting emotionally to market volatility. 

Those moments represent transformation. 

Connecting money with meaning 

Joe Pine’s idea of transformation highlights another important insight: money itself is rarely the end goal. 

It is a means to something else such as security, freedom, opportunity or time with family.
When financial planning focuses solely on accounts and balances, it risks missing the bigger picture. But when advisors help clients connect financial decisions with personal values, planning becomes far more powerful. 

• A retirement projection becomes a conversation about lifestyle.
• A savings strategy becomes a conversation about future choices.
• An estate plan becomes a conversation about legacy. 

That is where planning shifts from technical work to transformational work. 

A more human role for advisors 

Technology continues to automate many aspects of financial planning. Tax software can generate projections instantly. Investment platforms can build diversified portfolios in minutes. 

But technology cannot replace thoughtful conversation. Advisors who thrive in the years ahead will likely be those who combine technical expertise with a deeper understanding of human behavior. 

• They will ask better questions. 
• They will listen more closely. 
• And they will help clients align financial decisions with what matters most in their lives. 

In many ways, the future of advice looks less like a transaction and more like a healthy relationship. Because when advisors help clients gain clarity, confidence and direction, they are doing far more than saving on taxes or managing money. 

They are helping guide clients through a meaningful transformation. 

Turn financial conversations into transformations 

1. Ask better questions. Open-ended questions often reveal more than technical analysis. Questions such as “What does financial security look like for you?” or “What would a great outcome from this plan be?” can uncover priorities that shape better planning decisions. 
2. Use planning tools as conversation tools. Balance sheets, cash flow projections and planning software should not just produce reports. They should help clients visualize trade-offs and understand how financial decisions affect their future. 
3. Address behavior, not just strategy. Many financial outcomes are driven by habits and decision-making patterns. Helping clients stay disciplined during market volatility or major life transitions can be just as valuable as designing the strategy itself. 
4. Make financial planning an ongoing dialogue. A financial plan should evolve as life changes. Regular check-ins allow advisors to revisit priorities, adjust strategies and keep clients aligned with their long-term goals. 

Be a better advisor

The greatest threat to your firm’s future isn’t market volatility; it’s irrelevance. Advisors who invest in genuine relationships with the next generation, ask better questions, and connect money to meaning will not just retain clients. They will earn them and get referrals.

Rory Henry is a registered investment adviser representative of Arrowroot Family Office. This article is published independently through Advis-ROR®, an outside business activity, and does not represent the views of Arrowroot Family Office.  It is intended for informational and educational purposes only and does not constitute investment advice. Sameer Munshi and Joe Pine are not clients of Arrowroot nor was there any compensation for their inclusion in this article.