To get in on the Great Wealth Transfer, advisors need the right tools

Younger generations are poised to inherit a significant amount of wealth over the next two to three decades from their aging relatives-some $68 trillion is estimated in the U.S. The so-called Great Wealth Transfer represents an excellent opportunity for wealth managers to attract new assets.

In our previous post on the topic, we discussed broad wealth management system competencies to have in place to support the younger generation's interest in sustainable investing, digital engagement, holistic money management and more. In this article, we offer some additional thoughts on the operational capabilities that should be at hand for wealth advisors who want to capture a share of this wealth transfer, starting from the first steps of the process.

End date processing and account splitting - The transfer of wealth itself should be simple. Heirs will have enough to worry about with settling the estate, so an advisor's system should at least make the process of passing assets from A to B simple. Wealth managers will need tools that seamlessly allow them to mark assets to market and transfer from estate accounts with ease and in adherence to capital gains rules.

Automated onboarding and portfolio adjustments - As clients sign up for services, firms should be sure that onboarding occurs swiftly, accurately and without a hitch. Service requests such as allocation changes, new account funding, deposits and withdrawals need to be as automated as possible. Our tools allow clients and advisors to request account actions directly from a branded portal, which will feed into central trading and rebalancing workflows that ensure the client has immediate access to requests and can track their status. Once the client is on board, wealth managers should be able to manage investments at scale. For example, a tool like Global Wealth Platform 's (GWP) rules-based TIA (Tailored Investment Automation) engine enables macro changes in the firm's investment positions to trickle down automatically to individual client portfolios in strict compliance with their individual investment strategies.

Digital presence - An investor portal allows clients to interact with their advisors and obtain timely, relevant information. An enhanced portal could also offer clients the ability to interact with their custodian directly for their tax reporting and elections-and boost the stickiness of the advisor's portal. In addition to interactive account service requests mentioned earlier, the GWP solution has the ability to pull statements, trade confirms, tax forms and notifications directly from the custodial website and display them within the advisor's portal securely, via API; it also supports electronic delivery elections from the custodian direct to the portal. The GWP client portal supports monitoring unmanaged accounts and liabilities to present the full view of clients' wealth without having to leave the advisor's site.

Sustainable investing - Once new clients and their new wealth are in-house, wealth managers must be able to support the booming interest in the sustainability and societal impact of an investment across environmental, social and corporate governance (ESG) parameters. A firm gains a major differentiator when it can incorporate impact and sustainability factors into its operations to quantify investments and align them with a client's values. The ESG data model being built within GWP will serve this need and will feed into the client portal as well as our modeling and rebalancing capabilities.

Alternative Investments - Similarly, traditional wealth firms are increasingly offering their clients priority funds that invest in alternatives, which is attractive to younger investors, and provide clients some exclusive investment options. With a solution such as GWP, the firm has the wealth software, fund accounting, investor services and tax reporting it needs to manage alternatives as well as the integration of any third-party investment sources to the client portal so clients can view their assets holistically in one place.

Transparency in investments - As clients become more engaged in the market, they will want to have the ability to understand the individual securities that are held in their portfolios within direct indexing, ETFs or other funds. Allowing individual clients the ability to look through their investments provides transparency and helps firms compete against other advisory firms that cannot offer information regarding what is actually held in a specific mutual fund or ETF.

Regular Payments - Whether new or existing, a client will want regular withdrawals from his or her accounts at some point. Most managers have left a cash float in accounts that require regular distributions, and many manage those distributions using a spreadsheet. The overhead required to manage payments offline eats into margins, causes errors and takes focus away from investment performance. Managing required withdrawals automatically becomes even more important as the client base ages. GWP has a built-in workflow to denote accounts that require recurring payments and prompt raising cash in sufficient time to make payments without having to maintain a constant cash balance, which is often a drag on performance.

Financial planning - No matter the generation, everyone can use some guidance when it comes to all the variables that impact one's financial life. For younger generations who may just be entering the market because of an inheritance windfall, financial education and support are especially critical. Firms that offer a client portal that provides investment perspectives and educational materials-or integrates with affiliated financial planning services-will help their clients better manage their wealth.

Wealth managers who holistically and efficiently meet the younger generation's range of service expectations are well positioned to garner some of the immense wealth changing hands in the Great Wealth Transfer. Partnering with a solution like GWP is a good beginning. Review our brochure for more information.

Wealth Management

GWP , portfolio management , wealth management software , Great Wealth Transfer

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