The rich heirs plan to dismiss the advisers of the wealth of their parents

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The transfer of wealth of $ 100 billions of older generations to younger generations should reshape the wealth management industry, because young investors plan to move their money to new advisers, according to a new report.

A new Capgemini survey shows that 81% of “next generation millionaires”, or those who are ready to inherit the great wealth of their families, plan to replace their parents' wealth management companies. Most have cited bad digital offers or a lack of services and products.

“We were amazed when our research returned with this issue,” Kartik Ramakrishnan said, CEO of Financial Services at Capgemini. “What this research generation is different from what previous generations have sought.”

Understanding the next generation of heirs will become more and more critical for wealth managers while a historical transfer of wealth begins. According to Cerulli Associates, more than 100 billions of dollars are expected to go from baby boomers and older generations to heirs and spouses. The majority of transfers (more than 60 billions of dollars) will come from millionaires and billionaires, which represents the highest 2% of households per wealth. And most flows will be in the United States

Companies that can best attract, keep and respond to the future of wealth will be best placed for the future. More than two thirds of leaders in the management of wealth interviewed by Capgemini said they focused on the commitment of the following generations.

However, the gap remains wide. A majority (58%) of the managers interviewed admitted that it was “difficult” to build relationships with the next generation. Beyond age differences, the new breed of inherited wealth (those born between 1965 and 2012) is considerably different from baby boomers in terms of investment, priorities and lifestyles.

Here are five of the main priorities of the next generation and how wealth managers can better adapt:

Young investors traditionally take more risks, given their deadlines and age. However, even adjusted for age, millennials and genetics like to live further on the risk curve, with memes actions, purchase options, cryptocurrencies and other more speculative asset classes.

Although the main objective of the rich boomers is the preservation of wealth, the next generation seeks aggressive growth, according to Capgemini Survey. The flood of videos and online investment explanators also gave younger investors more confidence by taking risks.

“It is a combination of age, risk propensity and conscience,” said Ramakrishnan. “This is the ability to know more, to know more, to know better how they could invest.”

While older investors are looking towards stocks and bonds, young investors want more crypto, investment capital and investment abroad. 88% of investors say that the next generation has more interest in investment capital than baby boomers.

Capgemini said that young investors think that solid returns can no longer be motivated by shares and bonds, and that investment capital and other alternatives can provide better long-term growth. Private Equity is also increasingly widely available through minimum minimums and third -party asset managers.

While young investors want more crypto, two thirds of wealth managers questioned by Capgemini say they have no investment options for emerging asset classes, including crypto.

Young investors are also more likely to venture abroad with their portfolios. The majority of millennials and the Gen Zers say they want “improved offshore investments”, according to the survey. The new poles of wealth from around the world are particularly interesting, notably Singapore, the United Arab Emirates and Saudi Arabia.

The following generations “are more global,” said Ramakrishnan. “They have traveled more. They understand the global dynamics. This allows them to be interested and obtain some of the yields they see in these markets.”

Young investors are digital natives, but wealth management companies have been slow to adapt – always relying on meetings in person or telephone calls for many customer interactions. While 78% of baby boomers prefer meetings face to face video calls, millennials want mobile applications that allow them to access and exchange their portfolios.

“This is not a 'we sit with you once a year and you guide you through the way your wallet is doing.' ', Or once per quarter and walking in your wallet,” said Ramakrishnan. “This is an active commitment channel and with nuggets consuming information they should obtain.”

Two -thirds of the millennials say they expect advanced digital offers from their wealth managers. Almost half complain about a lack of services available on their favorite digital channels.

Aside from the useful content in short “nuggets”, new generation investors want real -time access to all their financial information in one place, depending on the report. They also want “intuitive tools for decision -making and secure transaction capacities”, according to Capgemini.

More than two thirds of baby boomers want the next generation of heirs to receive financial education to manage their inheritances in a responsible manner. However, many education programs for wealth management companies are not effective. Some say that the programs are too dry or speak to young investors or feel overwhelmed.

“It is not only a question of publishing these enormous reports which speak of the impact of interest rates and what is happening with the market,” said Ramakrishnan. “It is difficult to consume for people. It must be something simplified, that people can pick up and something that can be exploitable.”

Josh Brown, CEO of Ritholtz Wealth Management, who built a large audience among Genzers with his podcasts, blogs and social media, said young customers want more authentic personal communications.

“” The new generation grew up following people, not businesses, “said Brown.” We understood years ago that it would first make someone with a fan and these fans become your potential customers. “”

In addition to tailor -made investment strategies, young investors are looking for a wider range of services related to their wealth. Planning the succession and taxation is essential, as well as philanthropy advice, according to Capgemini. They also want a growing list of concierge services, luxury trips and tailor -made experiences, advice and information on luxury purchases, especially fashion, beauty, jewelry, wine and spirits.

Despite their young people, the next generations are also looking for quality advice on medical care and well-being, as well as education council (i.e. admissions). Goldman SachsFor example, is associated with a concierge based in London to provide support for the medical concierge, home consultations with doctors and education.

Cybersecurity advice is also a fast growing service for wealth management companies.

“It is this ability to get something that can be exclusive, that they may not be able to get otherwise,” said Ramakrishnan. “The next generations are more experienced on the experience than products. It is therefore not a question of buying luxury products; these are luxury experiences, tailor -made experiences. These are the types of partnerships that wealth management companies can provide that will make loyalty among this customer.”