How to meet the challenges of generational wealth transfer

A massive generational wealth transfer is underway, changing how clients think about money. This overview explores the challenges financial professionals face and how to stay relevant and retain next‑generation clients.

Financial planning and wealth management involves looking to the future for your clients, but what happens when those clients change?

The world is on the brink of massive generational wealth transfer as baby boomers prepare to bequeath their assets to their children. According to wealth management research company Cerulli Associates, approximately $68.4 trillion in wealth will transfer to the next generation by 2048.¹

Inheritors will view finances differently than their parents. How can financial professionals be sure that they stay relevant to these new clients so that they can serve them well and retain their business? Financial professionals face several challenges as they prepare to support this intergenerational wealth transfer. Here are some of the potential issues and how to address them.

Inheritors lack financial literacy

One of the biggest challenges for inheritors will be understanding how to handle their new assets. A report from the TIAA Institute and GFLEC indicates that financial literacy among U.S. adults has reached an all-time low.²

Gen Z demonstrates lower levels of financial literacy than previous generations. When presented with a survey of questions about earnings, savings, investing, debt and insurance, Gen Z participants answered only 38% of questions correctly, compared with Baby Boomers, who answered 52% of questions correctly.³

Parents and their wealth managers have an opportunity to educate inheritors now about these issues before handing over significant wealth.

Inheritors are often left in the dark

Benefactors do not always keep inheritors in the loop when planning their estates. Some inheritors are left out of discussions until the last minute, or even altogether, leaving them uninformed about their parent's plans until the will is read. Even those who do have access to estate planning information don't expect to inherit money any time soon, and may not be interested in exploring the issue.

Communication is key here. Parents should include their adult children in estate planning conversations and keep an up-to-date will, ensuring that their family knows exactly what is in it. They should encourage their children to take an interest in the family's future wealth. This goes hand-in-hand with financial literacy discussions.

Family conflicts

Clear communication is a no-brainer in an ideal world, but family relationships are often anything but ideal. Different expectations between parents and siblings can create rifts, leading to mismatched agendas and creating family resentments. The worst-case scenario is a contested will, where inheritors fight over wealth and hold things up in the courts.

Where possible, family members should adopt a mature approach to conflict resolution, working out their differences with the possible use of outside counselling. Establish a family council and a constitution that will govern future decisions. That may require a trusted third party mediator.

Younger generations want digital experiences

Wealth management companies that have been used to dealing with older clients are in for a shock when wealth passes to the younger generation. What might have been acceptable for baby boomers and the older "silent generation" might not fly with generation X and millennial family members.

Forbes found that only a third of high net worth individuals were happy with their wealth management provider. The vast majority (91%) said they wanted a financial professional who is an innovator, leveraging cutting-edge financial technology and reporting.⁴

As a financial representative, you would do well to explore digital transformation options and experiment with more modern, digital client interfaces and services. This will increase your chance of retaining their assets under management in the shift to a younger clientele.

Differing social values

It is also important to prepare for a shift in social values among inheritors. Research shows that 96% of Gen Z clients said they were more likely to choose a financial professional or investment platform base don sustainable investing offerings.⁵ Prepare yourself to address these and other new values when counselling inheritors.

Succession planning within your practice

When wealth changes hands, wealth managers that had a long relationship with their older clients might be left out in the cold. Avert this problem by building relationships with your clients' future inheritors early on, helping with financial literacy programs and factoring them into estate planning conversations. Make this succession planning a part of your own practice, devoting time and attention to developing those relationships and understanding your future clients' values.

Are you prepared?

With a torrent of generational wealth transfer just around the corner, it's time to prepare for a new group of clients. That preparation includes changing how your address your clients and how you offer your services. It extends to an honest evaluation of your practice's own internal culture. The race is on to modernize and follow a new generation as it pursues different goals.

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Sources:

¹ Cerulli Associates, “Cerulli Anticipates $124 Trillion in Wealth Will Transfer Through 2048,” December 5, 2024.

² TIAA Institute, “A decade of tracking financial literacy in America: Findings from the 2026 ITAA Institute-GFLEC Personal Finance Index,” 2026.

³ TIAA Institute, “A decade of tracking financial literacy in America: Findings from the 2026 ITAA Institute-GFLEC Personal Finance Index,” 2026.

⁴ Forbes, “The Wealthy Are Dissatisfied With Their Financial Advisors. What Are They Looking For?” July 14, 2025.

⁵ Morgan Stanley, “Morgan Stanley Sustainable Signals: Individual Investors Continue to Show High Levels of Interest in Sustainable Investing in New Survey,” April 30, 2025.

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