The Changing

Face of Wealth
Management
Customers
The long-anticipated transfer of wealth to
Gen-Xers and millennials has begun. How
can banks position themselves to succeed
with these clients? Insights from a recent
ABA survey offer some clues.
Adapted from a 2019 ABA research study on the state of clients, advisers and wealth
management practices. Download the full report at aba.com/wealthreport.
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aba.com/BankingJournal | ABA BANKING JOURNAL 37


In 2025, the oldest members of the Baby Boomer gen-
eration will be in their late 70s; the youngest will be 60.
The wealthiest generation in history, these Boomers are
set to pass down a record-breaking amount of assets to
their heirs. The largest intergenerational wealth transfer
in history is underway. By 2043, an estimated $68 trillion
will pass to succeeding generations, according to Cerulli
Associates. Industry experts have dubbed this “The Great
Wealth Transfer.”
This wealth is a combination of investable
financial assets (equities, bonds, alternative
assets) and non-financial assets (privately held
business interests, oil, gas and mineral rights,
farm and ranch land, investment and personal
real estate and collectables). Most of this wealth
will land with Generation X (those born from
1965 to 1979) and millennials (born from 1980 to
1994)—two generations that have very different
spending, savings and lifestyle habits. High-net-
worth individuals, families and their advisers
must be prepared for the changes and responsibili-
ties associated with this wealth transfer.
For banks, this intergenerational wealth trans-
fer comes in amid other perennial business chal-
lenges, such as growing nonbank competition,
pressure to reduce fees and lagging technology.
“One day we might wake up and find out that
an Amazon wants to run a wealth management
service,” adds Bill Martin, chief investment
officer at INTRUST Bank and chairman of the
ABA Wealth Management and Trust Conference
advisory board. “We just need to be aware that
possibility exists and be aware of the need to dif-
ferentiate ourselves by driving very meaningful
relationships.”
Wealth management clients in the coming
decade will differ from their predecessors in
many ways. The new client population will be
more:
Multi-generational. In 2025 we’ll have
five generations of wealth owners, with dif-
ferent perceptions about wealth, social mores
and philanthropy. Gen X and boomers who
Wealth Management 2025
Dive into the details of how bankers and advisers are pre-
paring for change by downloading ABA’s free report—The
Changing Face of Wealth Management, from which this
article is adapted—at aba.com/wealthreport.
38 ABA BANKING JOURNAL | JANUARY/FEBRUARY 2020
“One day we might wake
up and find out that an
Amazon wants to run
a wealth management
service. We just need
to be aware that
possibility exists and
be aware of the need to
differentiate ourselves by
driving very meaningful
relationships.”
—Bill Martin, INTRUST Bank
stay in the workforce beyond traditional retirement age will still
be wealth creators. Gen Z will be entering prime working years,
on the verge of outnumbering millennials as the largest cohort of
new wealth creators. And for the first time in U.S. history, older
people (78 million age 65 or older) will outnumber children (76.7
million under 18).
Diverse in attitudes about wealth. Each generation has been
influenced by the economic events and social factors of their time,
which have shaped their financial attitudes and values—and in turn,
their expectations of wealth service providers. Gen X, millennials
and Gen Z investors are more apt to look at environmental sustain-
ability, social responsibility and governance of the companies they
invest in. “Their areas of focus may be somewhat different from
where mom and dad were 20 years ago,” says Marie Tormey, EVP
and chief fiduciary officer for PNC Asset Management Group.
“Responsible investing is more important to them, and they’re more
socially aware than maybe was the tradition in the past.”
Cynical. During their formative years, millennials and Gen
Z experienced the repercussions caused by the financial crisis of
2008 and the ensuing Great Recession. These events have shaped
their perspective on governments, institutions, banks and brokers;
and their perspectives are similar to those of the silent generation
and contrast greatly to Gen Xers or Baby Boomers. These distinct
perspectives are shaping wealth in motion, and advisers have to be
sensitized to these dynamics.
Online. Younger investors are embracing robo-advisers, online
investment clubs and social trading. They place a high value on
crowdsourcing and the validation that comes from transparency and
peer endorsement. According to PwC, “millennial investors seem
to prefer information received from social media, which means they
can participate without relying on traditional financial outlets, a
financial adviser or an institutional analyst’s view of the market.”
Thinking in the now. Many younger people are more focused
on transient experiences—travel, meals and events—than on accu-
mulating wealth or acquiring physical assets, such as real estate.
Furthermore, while millennials in particular have deferred major

EIGHT KEYS TO WEALTH
MANAGEMENT IN 2025
ABA research identified eight
foundational aspects of what wealth
clients will expect from providers
3 6
Leading with insights and Expanded client engagement,
advice, rather than pushing with more client access to
product, especially as advisers to get individualized
products continue to become assistance and answers to specialized
commodities, available from banks questions.
and nonbank entities alike.

7
going forward: Effective use of client data to

4
Exemplary emotional be able to anticipate the next

1
Differentiated lifecycle
approach, truly understanding
where clients are in their
financial lives and using that insight
intelligence to have deep, big thing in the client’s life and
meaningful conversations offer forward-looking advice to meet
that uncover clients’ aspirations and that emerging need.
goals.

8
to serve them in an individualized Social responsibility of the firm

5
way. Ergonomic mastery, and its products—responsible
competence and efficiency investments that integrate

2
Clear value proposition on in using the tools and environmental, social and governance
what the bank delivers for its technologies the firm has available to factors into investment processes
fees, such as a longstanding serve clients. and decision-making.
tradition of fiduciary responsibility
and full balance sheet financial
management.

life choices such as marriage and children (see cover story on page
20), they also often defer the need for traditional financial advice.
“We look for ways to attract those younger clients who may not
have the level of wealth that we would traditionally think a client
should have,” Tormey says. “We’re thinking about how we can
become their provider. Maybe it’s borrowing needs for now, but in
the future they will certainly have assets amassed. We want to be
there, having a relationship with them.”
Long-lived. Baby boomers have good odds of living to 80 and
beyond. Millennials and later generations, provided they make
it through middle age (see page 24), could expect to live to 100.
Longer range planning makes sense, says Mark Gim, president
and COO at Washington Trust Company. “Clients need to consider
the best way to preserve wealth and plan for money to last for a
longer lifetime, which is more than just short-term performance.
It’s more than saying, ‘I did 20 basis points better than the S&P
500.’ It’s managing wealth over the long term.” The advisers’ chal-
lenge will be to convince 20- and 30-somethings to buy into that
delayed gratification.
What will wealth management advisers
do differently in 2025?
In response to these trends, advisers will help clients manage their
finances, build healthy portfolios and ensure their legacies are car-
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ABA research suggests that wealth advisers will
have to adapt their practices in five key ways:
• Focus more on proactive client outreach and
business development.
• Forge relationships with the next generations.
• Continuously hone their skills and industry
knowledge.
• Provide more holistic advice for clients.
• Provide more individualized service.
Clients are changing. Delivery expectations
are changing. Technologies are changing. Advis-
ers are changing. Regulatory requirements are
changing. Taken together, these changes invite
bank leaders to take actions today to lean in and
ride on top of the wave to the future state.
“The banking industry needs to recognize
that it is becoming viewed as a legacy niche
player in the wealth management business,”
Gim explains. “The perception is that the cooler,
fast-moving, agile, nimble players are where you
really ought to go when you want your wealth
managed.”

ried out in the ways they want. They will do this while accounting
for a multitude of factors that influence wealth.
What changes is that in 2025, advisers will be serving five genera-
tions of wealth owners who hold varying perceptions about wealth,
social mores, philanthropy—and what they want from an adviser.
TOOLKIT
Become a forward-focused adviser and find ways to con-
nect with multiple generations of clients at ABA’s Wealth
Management and Trust Conference, Feb. 23-25, 2020, in
Orlando, Fla. Register at aba.com/wmtc.

aba.com/BankingJournal | ABA BANKING JOURNAL 39

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