Engaging the next generation investor

The industry has been forecasting and preparing for the largest generational wealth transfer in history. Cerulli Associates projects that $124 trillion in wealth will change hands by 2048, with roughly $62 trillion of that coming from high-net-worth and ultra-high-net-worth households (those with around $5 million in investable assets).¹ An estimated $2.5 trillion is already changing hands each year through inheritances and family gifting.² But three things stand between what’s actually transferred to the next generations and who remains a partner in the transfer.

The first is math

Rising healthcare costs are increasingly draining the savings that investors assumed their children would inherit. Once daily care needs begin—whether in assisted living, memory care or a traditional long-term care facility—families can see their wealth greatly reduced, a reality that's prompted some experts to suggest the wealth transfer may ultimately be smaller than the headline projections suggest.³

This changes the conversation. This isn't just about building and sustaining a multi-generational relationship before the money arrives; it's about planning to protect the wealth before the transfer.

The second is capacity (what’s on their plate)

Gen X is still managing the responsibilities of the sandwich generation—caring for aging parents while still financially supporting their own kids, sometimes cutting back hours or stepping away from work altogether to manage it all. That leaves less time, money and bandwidth for their own retirement planning, let alone for engaging deeply in someone else's plan.

This can delay action. With limited time and bandwidth, planning conversations often get pushed aside, and financial pressures—caregiving costs, reduced income and delayed retirement timelines—are often unaddressed, leaving less time to be proactive.

The third is trust

Millennials and Gen Z come with their own lived history: student debt, early career instability and a front-row seat to choices their parents had to make. That history has left many with real skepticism toward the institutions that shaped their financial starting point—both generations remain burdened by student debt, and Gen Z is now entering a job market where the US unemployment rate runs roughly double the national average.⁴ These generations are often drawn to values-aligned, responsible investing, wanting their money to reflect the priorities their parents did not have time to consider.

This shapes more than just investment philosophy. And it's not just skepticism that pushes heirs to look elsewhere once they are in control; building trust across generations often depends on getting past a hurdle that has nothing to do with a financial professional at all.

Build trust by meeting the real psychological need

That hurdle is often a parent's own reluctance to talk about money and mortality with their children.

Many clients are simply uncomfortable discussing their estate plans with their own families and choose not to share the details until after death.⁵ That leaves financial professionals in a position to help open a dialogue the family may not be having on their own—not by pushing for full financial disclosure, but by encouraging a client to loop in adult children on the basics: how the estate plan is structured, who’s been named in what role and what they'd like their children to understand now rather than later. Even disclosing a general outline of the estate plan can help avoid disputes that often follow when heirs are caught off guard.

This could look like proposing a family meeting focused on estate basics rather than account balances, or offering separate, one-on-one conversations with adult children. These options meet multiple needs: adult children are given a high-level overview of the estate, parents are given more insight into the questions their heirs have and the financial professional is able to make a connection with the next generation.

The outcome of skipping these multi-generational conversations is real: more than 70% of heirs are likely to change financial professionals after inheriting, and most future beneficiaries don't plan to keep their parents' financial professional at all.⁶ Being the one to initiate these difficult conversations opens the door to a very different kind of relationship with a family—one where wealth planning and portfolio decisions can reflect more than one generation at a time.

Align wealth planning with next-generation client priorities

Planning conversations have traditionally centered on accumulation and preservation—build it, protect it and pass it down. But for many clients, preservation is a growing challenge.

Increased longevity and rising long-term care costs are eroding estates before they ever reach the next generation.⁷ That makes preserving what a family has already built just as important as growing it. Proactively addressing this issue—ahead of an expensive or emotionally intense health event—helps financial professionals ensure they are well-positioned to guide multiple generations in the same family in protecting the life they have and the lifestyle they want for the future.

Priorities shift again once wealth does reach the next generation. Gen X, closer to retirement themselves, will often need this influx to supplement their own plans while still growing it for their beneficiaries. Millennials and Gen Z, further from retirement, have more runway to let that inheritance grow—often choosing to direct it toward more values-aligned and responsible investments. At this time and for these generations, it’s not just returns on a statement; it’s about flexibility.

Family goals now span generations, not just direct descendants, which means planning conversations now account for the whole family system rather than one generation at a time. Part of that plan may include tools built for stability, increased longevity and guaranteed outcomes—something that gives a family the foundation for growth.

Redefine portfolio strategy for the next generation

Portfolio construction has long followed a familiar arc tied to age and proximity to retirement: grow aggressively when the timeline is farther out, then gradually shift toward preservation. That arc still holds true in principle, but each generation's version looks different in practice.

Gen X heirs, closer to their own retirement, often have portfolios with a balanced mix of growth and protection as a matter of necessity. An inheritance at this stage can change that calculation—the added cushion may free up room for renewed growth for those who've leaned conservative, or allow others to add protection without slowing the growth they still have some time for. Either way, the inheritance could expand what's possible rather than simply reinforcing the direction already in motion.

Millennial and Gen Z heirs are, in many cases, still a step removed from this wealth—more likely to inherit from Gen X parents down the road, or to receive a smaller inheritance through direct gifting from Boomer grandparents. But with decades of time horizon still ahead along with portfolios shaped by their own early-career investing, the eventual arrival of that wealth calls for a strategy built to augment it without disrupting the strategy already in motion.

Growing interest in digital platforms and alternative strategies tends to rise with each successive generation, moving from a willingness to explore to an expectation of inclusion.⁸ Less traditional planning strategies are often met with curiosity, and conversations around a wider variety of diversification options tend to be welcomed.

Financial professionals who are able to recognize the hard truths of each generation and approach retirement timelines with flexible options are better positioned to weather a wealth transfer—whenever it happens and whatever it looks like.

A practice that spans generations

The Great Wealth Transfer isn't just a shift in assets; it's a shift in who gets to guide a family through it.

Which financial professionals are next-generation clients more likely to keep around? Those who help clients get past a reluctance to talk about money and mortality, regularly ask about what’s currently on a client’s plate, are genuinely curious about the realities of a client’s heirs and are able to offer a variety of strategies that reflect what each client is really facing.