Traditional wealth managers need flexibility to respond to millennials’ priorities

A substantial and far-reaching transfer of assets is underway as millennials start to take over management of their family assets at a time when high net worth wealth has reached unprecedented levels. 

Being mostly highly educated, widely travelled and well informed, millennials have a keen sense of determining their own future. Their vision is likely to differ in many ways from that of their parents and grandparents, including how to manage their family wealth.

Concerns about social issues, climate change and the need to defend and repair the environment are likely to be high up their priority list. And, with a strong sense of the power of wealth, they are also more likely than previous generations to put their assets to work through investment choices that match their values.

Lasting legacy

The question, however, is how. The majority of millennials, although well informed about social and environmental issues, often know little about the world of finance or how to achieve their aims. Fortunately, sustainable solutions designed to generate social and environmental benefits while also delivering financial returns are increasingly popular, and can enable millennials to give purpose to their wealth and realize their ambition of having a positive impact on society.

A lasting legacy will be high on the millennials’ wish list, but the most immediate imperative will be a consensus succession strategy, with the aim of providing for all family members while securing wealth for future generations. As family relationships can be complex and consensus often elusive, HNW families often select an external wealth manager with the experience and skills to devise and implement appropriate strategies.

Trusted partners

The expectation among HNW families is that the wealth manager should provide more than just financial advice and expertise, but offer a more strategic view on how to manage the family’s affairs, fulfil its financial objectives and develop a legacy in both the financial and non-financial senses.

Above all, families need a wealth manager capable of developing close relationships across all generations, and, in the process, become a life adviser and trusted partner for the family as a whole.

Once established, such a relationship offers what online wealth management platforms cannot: trusted advice provided as part of an ongoing dialogue, prized especially by millennials who typically have limited experience in financial matters.

Even sophisticated investors, who are happy to use digital technology to manage various aspects of their finances, still depend on trusted advice on more strategic family and financial issues. While digital channels may be efficient to deliver educational material, real-time portfolio analysis and performance reports, they cannot replace a face-to-face relationship.

Meeting expectations

Once they take over the family reins, millennials typically have expectations that differ from those of their parents, which requires wealth managers to be responsive to their needs.

Swiss Life Global Solutions has long experience of working with clients’ trusted business partners to help them meet their range of challenges, from managing family wealth and succession planning to constructing their legacy. Because self-determination is basic to human life, Swiss Life’s core philosophy is to help clients and their advisors create their financial security and determine their objectives in order to lead the lives they choose.