The UK wealth management industry is facing one of the most significant demographic shifts in its history. Over the coming decades, trillions of pounds are expected to pass from older generations to their children and grandchildren – creating both a major opportunity and a substantial challenge for private banks and wealth managers.

Attracting and retaining younger clients has therefore become a strategic priority for UK wealth managers. Firms are rethinking how they engage with future generations of investors through intergenerational planning and digital marketing strategies.

Wealth managers also need to tailor their offerings to younger investors who are digital-first and expect transparent pricing and advice aligned to their values and lifestyles.

We spoke to a chartered wealth manager, a chartered financial planner and a private banker to find out how they are looking to attract younger clients.

Intergenerational planning

The UK is on the cusp of the largest intergenerational transfer of wealth, with between £5.5 trillion and £7 trillion expected to pass between generations over the next three decades. [1]

This incoming Great Wealth Transfer is reshaping how private banks and wealth managers engage with clients’ children and grandchildren as firms seek to retain assets across generations.

“When we do inheritance tax planning and a client sets up a trust for descendants, I tend to insist on meeting their children or grandchildren if they’re in their twenties,” says a chartered financial planner at a private bank. “And when you meet the next generation and get to know them and explain wealth and estate planning topics to them, it makes it much more likely they will come to you when they receive their inheritance.”

A chartered wealth manager at a private bank echoes the business imperative of retaining family assets.

“We do intergenerational planning from the point of view of protecting ourselves, protecting the business and protecting clients,” he says. “If the plan is to build wealth to be passed to the future generation, then it’s essential that clients bring their sons or daughters to meetings and we get to know each other. Even though we are planning for the mother or the father, we want the next generation to eventually become our clients.”

He adds that once the children are involved, in some cases they immediately become clients.

“We do the major planning for the older generation while keeping the younger generation in the loop. But at the same time, we also do a bit of planning for the younger ones. So for children with savings, we nudge them towards the digital channel so they then become our clients. The children are in the digital channel and the parents in the advisory channel, but they’re all under the same umbrella.”

Offering no fees on child savings accounts for children under the age of 16 is another way to retain family assets.

“I’ve found the most effective way to ensure heirs keep their assets with us is not charging a fee for Junior ISAs,” says the financial planner. “We tell the parents there are no fees, no ongoing advice fees and to top it up every year. When the child turns 18 they have usually amassed a nice sum. And 98% of these children will stay with us.”

He adds: “We also provide fee grouping for family members. So the more wealth you have as a family, the less the ongoing advice fee. And we will include the whole family. So if you have clients in their 60s or 70s and they introduce their children who are in their 30s, the children benefit from the fee discount. Furthermore, we usually have a minimum investment amount for younger clients but this doesn’t apply for clients’ children. So the clients see material benefits to introduce their children.”

Digital marketing

Besides multi-generational planning, firms are also looking to attract new younger clients who aren’t related to existing clients. And here digital marketing strategies are key.

“In terms of directly marketing to younger prospects, we look for people who are already high earners or who are accelerating their earnings or reaching their peak earning potential,” says a private banker. “And we do this through LinkedIn by targeting people working in financial services at organisations including hedge funds and asset managers who are portfolio managers or traders.”

He adds that targeting people whose earnings are accelerating makes good business sense because “they will organically increase your book size, as opposed to retirees who tend to be drawing on their assets.”

Meanwhile, the wealth manager says social media has helped reinvigorate his firm’s brand so it resonates more with young, wealthy people.

He says “shouting about the brand” on social media is a core part of the marketing strategy, with his firm active on TikTok, Facebook, Instagram and X as well as LinkedIn.

“We recently formed a team who’ve been given the specific task of repositioning our brand around TikTok and other social media platforms,” he says. “We record podcasts where we explain who we are, what we do and how we can help and support that younger demographic with wealth planning. And this has been quite successful.”

The social media strategy is part of a wider drive to modernise the private bank.

“It’s all about revamping the brand from a private bank for the old money to a more diverse brand for the future generation focused on digital innovation. So we’ve been spending money on branding, research and marketing.”

This has been accompanied by heavy investment in technology to accommodate the needs of younger wealth builders.

“From the digital side of things, the younger generation these days are very tech-savvy. Therefore, we’ve invested a lot of money creating a new digital platform and introducing new apps as we reposition our brand. And we did this to attract the younger generation.”

New propositions 

Such investments are part of a broader technology drive, where firms are launching new low-cost digital propositions tailored to the needs of younger investors.

“We acknowledge there is a younger generation who can’t afford our minimum investment criteria for private banking services,” says the financial planner. “And we know this younger generation are more into the online world than face-to-face traditional financial planning. So our firm offers younger investors a digital service where they can invest with no minimum amount and have access to ready-made portfolios.”

He adds: “It’s an entirely automated journey and we don’t get involved on the advice side. But if these younger clients who begin their journeys online build up wealth to £100K we will be notified and will then speak to them. This can happen after they receive an inheritance. We will call them and say this autonomous approach is not necessarily the best thing for you now and do you want to have a chat?”

The wealth manager says his firm has also introduced different advice models to appeal to a younger audience. These include a hybrid proposition charging a small fee for basic digital advice as well as a self-execution service with no fee.

“These digital propositions have really helped us because we’re seeing a lot of clients come to us who are at the start of successful careers or young entrepreneurs at the start of their business journey. And they don’t necessarily have £1 million or £2 million in their bank account.”

Financial knowledge

The wealth manager says some younger clients have high levels of financial literacy.

“Young people spend a lot of time watching educational videos on social media. So some already come on board with a lot of knowledge and come to meetings with their laptops and Excel spreadsheets and all these projections.”

The private banker says his young wealthy clients have mixed levels of knowledge.

“Quite a big chunk of my clients are younger portfolio managers at hedge funds or large asset managers. And these are people who are experts in particular areas, such as Asian equities, and tend to be incredibly knowledgeable in that space. But when you try and explain to them how their pension works or how an offshore bond works or how the Chancellor might change a certain tax it completely confuses them. So just because someone works in financial services doesn’t mean they’re aware of tax planning or wealth planning.”

Engaging through education 

These knowledge gaps make the educational piece an important component of marketing strategies aimed at younger prospects. The private banker says his organisation offers both educational content and events for younger people.

“We’ve done presentations on particular topics where young people come along and ask questions or listen to a panel of experts,” he says. “Particularly around the Budget or end of the tax year, we will bring along experts who can answer queries, including individuals from the private bank as well as accountants or solicitors we work with.”

He adds that his bank also produces a comprehensive wealth management guide, alongside a shorter version, both of which are aimed at a younger audience.

While educational content is seen as a powerful marketing tool to build trust with prospects, the wealth manager notes the importance of educating younger investors once they become clients.

“Some younger clients are particularly interested in Bitcoin and crypto. So we spend a lot of time convincing them about the benefits of diversification and giving them an understanding of risk management.”

Meanwhile, the financial planner says he feels he has a duty to help the younger generation of clients build their financial knowledge.

“Part of this education is explaining to young clients the volatile nature of investments. So I explain there is a possibility their investments will go down and ask how their lifestyle would be impacted by a 10% fall in their assets. So it’s all about education. I’m not here to sell to them. I’m here for their own benefit.”

There are also significant potential benefits for those wealth managers that win the race to attract and retain Britain’s next generation of wealthy investors. And according to the industry experts we spoke with, winning that race will require a combination of tailoring fees, developing marketing strategies for a digital-native audience, educational support and new advice models.

[1] https://www.unbiased.co.uk/discover/personal-finance/family/what-is-the-great-wealth-transfer-and-what-does-it-mean-for-you

Will Roberts is editorial director at CoreData Group, a global specialist financial services research and strategy consultancy. To find out more about our research programmes you can reach him at [email protected]