Preparing for the Silver Tsunami

The wave of retiring Americans is reshaping the wealth management landscape

By Steve Jones
Financial Advisor
Senior Vice President, Regional Director
Wealth Management


The “Silver Tsunami” – a phenomenon referring to the 10,000 baby boomers retiring each day – is rapidly reshaping the wealth management landscape.

Baby boomers have heavily influenced the industry for years as a key group of investors. While they make up 35 percent of American households, they control more than 50 percent of all investable assets.

Yet, many baby boomers might still struggle to fund their retirement. And with more of them nearing a phase of distribution, financial professionals who serve this generation may need to reconsider how they’ll lead clients into retirement while addressing their own client and asset growth strategies.

Here are three ways financial professionals can prepare for the upcoming generational shift:

Reduce Clients’ Uncertainty About the Future
Now, more than ever, financial professionals have an important responsibility to identify clients nearing retirement and assess their readiness. Baby boomers will face several complex decisions in the years leading to retirement, including when to claim social security and how to fund future income. The recent economic impacts of COVID-19 might make those decisions even more impactful if the market value of certain investment accounts are lower than projected.

Furthermore, the “Great Wealth Transfer” consisting of $68 trillion that’s expected to pass from aging investors to heirs in the years ahead may be accelerated by the impacts of COVID-19. Some older clients may choose to pass down certain assets earlier than they originally planned. To help protect the future of clients’ retirement and their assets, it’s critical that financial professionals facilitate difficult conversations now about estate planning and their financial future.

Engage Clients’ Heirs
Financial professionals shouldn’t overlook the chance to include clients’ children or spouses in family financial planning conversations. In fact, only 31 percent of potential heirs are actively involved in their parents’ financial planning processes. This can present major opportunities for financial professionals to secure future business and avoid watching previously managed assets walk out the door.

By connecting with clients’ heirs early on, financial professionals can help them eliminate the “what now” moment that tends to happen when heirs inherit their parents’ or spouse’s wealth. Rather than engaging another financial professional, or no financial professional at all, heirs might be more likely to rely on their existing financial professional and more confidently make decisions about their newfound wealth.

Be Flexible
Each generation adopts their own opinions and methods toward managing finances. However, it’s possible that the financial challenges from COVID-19 may exponentially reshape the way younger generations understand, invest, and spend money. Financial professionals should proactively prepare for changes in younger clients’ expectations to preserve the future of their practice and protect their client retention strategies.

Protecting Your Clients and Your Practice
For many financial professionals, there’s a sense of accomplishment from seeing clients reach the retirement they’ve long planned. However, the high volume of Americans nearing retirement combined with the financial consequences of COVID-19 make it more important than ever for financial professionals to help clients navigate the road to retirement.

At the same time, financial professionals who don’t include heirs in financial planning conversations and adjust their services to align with clients’ changing expectations may find themselves vulnerable to losing future business.

To learn more about leading clients into retirement and preserving the future of your practice, call HilltopSecurities at 833.4HILLTOP.

This material is for professional use only.