Insights on managing generational wealth

Produced by Rogers Insights Custom Research. n=192. Margin of error: 5.9%, 9 times out of 10

Your best referral source is your existing client base.

So finds the latest Advisor Group Investment Insights* survey, which asked Canadian advisors about how they managed generational wealth.

More than a quarter have received an introduction to clients’ children. Further, one in ten say their clients have extended invitations to their grandchildren.

And the referrals aren’t just to offspring. Twenty percent of clients have suggested their parents meet their advisors with an eye toward advisors either taking over wealth management responsibilities from existing firms, or forging new ones from scratch.

Read: How young advisors can overcome inexperience

A HEALTHY PERCENTAGE OF CLIENTS ARE COMFORTABLE RECOMMENDING THEIR ADVISORS TO THEIR RELATIVES

What percentage of your clients have introduced you to…

…with an eye toward your managing their assets?

Generational wealth makes up a significant portion of AUM

Of course, not every recommendation leads to a full-fledged working relationship. But when they do, the results of referrals are, nonetheless, solid.

A significant percentage of advisors answering the survey say more than 15% of their existing client base is made up of people introduced by their parents.

Read: Working with next gen clients

Further, those advisors indicate wealth from the second generation of clients makes up 15% of their current AUM, with grandchildren of clients contributing 6% more.

As a percentage of your total AUM, how much is from…

What spurs client complaints?

Concerns about fees and other payments spur clients to complain to their advisors most frequently.

The good news: only 2% of respondents say those complaints are sparked by lack of advisor transparency.

Read: Taking back former clients

Not surprisingly, issues relating to inadequate returns came in a close second. Fortunately, only 2% of respondents indicated their clients say they expect returns that aren’t commensurate with the amount of market risk they’re taking.

What do clients complain about most? n=192

What’s bugging advisors?

A question about how many industry self-regulators should govern registration and other advisor activities got a surprising shrug from survey respondents.

More concerning than a regulator merger are the regulations themselves, which advisors said posed the greatest threat to the industry

In your opinion, the greatest threat to the industry is… n=192

Do you support or oppose the merger of IIROC and MFDA?

While pension offerings are dwindling, significant numbers of clients are still vested

Employers aren’t creating pension programs the way they once did, but survey respondents report a significant percentage still have either a defined benefit or defined contribution plan.

Just shy of 42% of respondents say clients have neither type of pension, so nearly half of advisory clients require soup-to-nuts income solutions beyond the sums offered by CPP and OAS.

Advisors have their work cut out for them.

What percentage of your clients has a DB or DC pension? n=192

*Investment Insights is a new editorial research initiative by Advisor Group in which we ask our audience questions about both top-of-mind and evolving trend issues that impact their businesses. Responses from these studies, which will be conducted periodically for the next 12 months, will appear in Advisor’s Edge magazine, as well as Advisor’s Edge Report and here on Advisor.ca.