Only 19% of Investors Work With Their Parents' Advisor: Cerulli

Younger clients, it said, may accept limited levels of financial advice at the start of the relationship but eventually will want more than what is being offered to them and will be willing to pay for it.

Cerulli classified 38% of respondents who use their parents’ advisors as Advice Seekers in its behavioral advice segments, compared with just 15% of Advice Seekers who have their own advisors. According to Cerulli, Advice Seekers generally are highly optimistic and open to new investment options. They are willing to pay for advice and cede discretion, and they prefer high advisor engagement. Moreover, these investors are more actively engaged in their personal finances.

“While they may begin as a sort of ‘marriage of convenience,’ advisors can create long-lasting relationships with their clients’ children,” Cerulli research analyst John McKenna said in a statement. “Advisors whose clients have financially interested children should work with them — either helping them with their own financial plans or directing someone else within the firm whose life experiences align with these clients to join the advising team.” 

For parents, having family-level conversations can smooth potential future trouble spots around inheritance or financial support if misfortune should befall either generation.  

“More than ever, involvement in financial discussions for wealth planning is becoming a ‘need to have’ rather than a ‘nice to have,’ and with an increasingly affluent millennial demographic, advisors cannot afford to squander such business-expanding opportunities,” McKenna said.