Fidelity Program Aims to Facilitate Easier Wealth Transitions

Fewer than four in 10 advisers say they have a successful track record of partnering with their clients’ children or spouses on successful wealth transitions, meaning the stability and longevity of many advisers’ practices may be in question.

Fidelity Institutional, the division of Fidelity Investments providing technology, solutions and insights to wealth management firms and institutions, has announced a new program designed to help advisers drive deeper engagement with clients and their families.

The program is referred to as “The Decade of Generational Wealth” and was developed by the Fidelity Center for Family Engagement. It outlines eight strategic imperatives for advisers to help establish successful family wealth transitions, with the related goal of helping advisers ensure the future success of their businesses.

According to Fidelity survey research, 58% of Millennial and Generation Z investors expect to inherit assets in the future, often amounts that would represent a sizeable addition to their current assets. On the other hand, only 39% of advisers say they have a successful track record of partnering with the next generation through a wealth transition. Furthermore, fewer than half (46%) of advisers say they are successfully partnering with female clients through a wealth transition.

“Our research found a disconnect between what the client of the future is expecting and what advisers are delivering,” says Tobias Donath, senior vice president, Fidelity Center for Family Engagement. “So, our goal is to help advisers use this decade to look around the corner and proactively adapt their business.”

The strategic imperatives underpinning the Fidelity program include the following:

  • Navigating change of control with the primary decisionmaker;
  • Facilitating transparency and family engagement in planning;
  • Empowering women as head of households and as investors;
  • Developing multigenerational dexterity for a socially diverse family;
  • Engaging the modern family and its complex planning considerations;
  • Expanding financial, emotional and familial health conversations;
  • Stepping into multigenerational life moments with families; and
  • Planning proactively for the Baby Boomer succession in adviser businesses and the industry.

“Advisers who aren’t proactively building capabilities to address the strategic imperatives and initiate conversations—that are sometimes emotional and difficult—may be in danger of losing connection with clients and their families,” Donath warns. “Advisers need to work across the generations to address these challenges.”

More details about the program are available here.

Additional context for the Fidelity program’s launch can be found in research published by the LIMRA Secure Retirement Institute (SRI), which suggests more than $7 trillion may be inherited by Baby Boomers and younger generations in the next several years. In addition, nearly three-quarters of these investible assets are held in taxable accounts.

According to a survey by financial services firm Edward Jones, 77% of Americans believe that estate and legacy strategies are important for everyone, not just wealthy individuals, yet only 24% of Americans are taking the most basic step of designating beneficiaries for all of their accounts. Of Americans who work with financial advisers, 64% reported never having discussed estate goals and legacy plans with their financial adviser. At the same time, only 34% of Millennials and Generation Xers have discussed their estate/legacy goals with their financial advisers, which increased only minimally for Baby Boomers (38%), the generation most likely to need estate plans in the near future.