Insights for financial institutions seeking to engage the next generation

Editor’s note: Kristin Hall is a product manager at Cogent Syndicated, part of the Escalent Group.

The great wealth transfer has received significant attention in both the media and in market research – and with good reason. A report published in 2024 by the global real estate consultancy Knight Frank estimated that, over the next 20 years, $90 trillion in assets will pass between generations in the U.S. 

Financial institutions are vying to capture a share of what is forecast to be the largest intergenerational wealth transfer in history. However, to secure a competitive advantage, financial services firms need to differentiate themselves. To better understand the needs, perspectives and priorities of those who expect to inherit, Cogent Syndicated, a division of Escalent, ran the Trajectory of Intergenerational Wealth Transfer (registration required) study.

The study aimed to answer the following questions:

  • What is the size of the wealth transfer opportunity over the next 10 years?
  • What will beneficiaries be doing with their inheritance?
  • How can financial institutions differentiate themselves to best engage these beneficiaries?

This report surveyed 5,571 affluent investors (those with $100,000 or more in investable assets) to evaluate their preferences for financial institutions and products as well as the factors behind their investment decision-making. The resulting data sheds light on how financial services firms of all sizes – from credit unions to wealth management companies – can best engage this audience.

Prescriptive vs. descriptive marketing insight

Our own observations, along with conversations with colleagues and clients, led us to conclude that much of the research around the impending transfer of wealth is descriptive in nature. It sizes the market, describes social causes and implications, identifies asset sources to be transferred (for instance, real estate assets) and summarizes the ramifications of this for estate planning. In contrast, we consider this research to be prescriptive in nature. 

Rather than replicating existing research, our team took a critical approach toward identifying what players in the industry want and need to know – namely, how to capture assets in the great wealth transfer. The report sizes the market specifically among affluent investors, focusing on four sets of key marketing management questions:

  • Market: How many affluent investors anticipate inheriting in the next 10 years? How much do they expect to inherit, and what do they plan to do with that inheritance?
  • Motivations: What emotional factors influence affluent investors’ decision-making criteria? How might we categorize this population into distinct motivational segments? 
  • Messages: What message themes will resonate with each motivational segment, based on the type of financial institution deploying the messaging?
  • Media: Which types of media and/or touch points – whether digital or personal – will be most effective in reaching affluent investors for each type of financial institution?

Tailoring financial messaging: Understanding emotional drivers and media preferences across investor segments

Financial products and institutions are subject to federal regulations and are limited by market factors such as interest rates. As a result, they offer a similar range of products and can only differentiate themselves through their level of service and connection with clients. To do this, they must have a clear understanding of the emotional factors behind a client’s decision to invest. By breaking affluent investors into motivational segments, the framework used allowed financial services providers to identify and tailor their messaging and outreach to align with what drives these future inheritors to make investment decisions.

This approach allowed us to narrow in on messaging themes that would resonate with particular segments. It also provided insight into optimal media touchpoints. 

While affluent investors of all ages were equally likely to work with financial advisors, Millennials were more likely to favor digital communication platforms such as mobile apps and social media. Meanwhile, Gen Xers and early retiree Boomers were more inclined to rely on e-mails, websites and phone calls.

Tapping into emotional drivers

Beyond generational differences, affluent investors are heavily influenced by their subconscious emotions. Consumer psychology studies have consistently shown that between 90% and 95% of decisions are made emotionally. Nobel laureate Daniel Kahneman’s research concluded that 90% of financial decisions are based on emotion rather than logic. Meanwhile, in his book “How Customers Think: Essential Insights into the Mind of the Market,” Harvard professor Gerald Zaltman argues that consumers make 95% of their purchase decisions subconsciously. 

By tapping into affluent investor’s subconscious emotional motivations, financial institutions can engage with prospective clients in ways that make them feel confident and positive about their choices – fostering enduring, trust-based relationships. 

To uncover these motivations, our team designed a series of statements focusing on emotional criteria for investing, such as the desire for financial security or prestige. Participants were asked to rate themselves on a seven-point scale based on how strongly they agreed – or disagreed – with each statement. We used these responses to categorize participants into four distinct motivational segments: financial achievers, leisure seekers, legacy leavers and cautious givers. We found that these segments differed significantly in their preferences for financial institutions, messages and media touchpoints.

Equipping financial institutions to engage future inheritors

Inherited wealth is, by nature, an emotionally charged topic. For financial institutions jockeying for a stake in the great wealth transfer, understanding the motivations behind beneficiaries’ investment decisions is crucial. By focusing on emotional drivers and creating segments, financial institutions to more effectively engage and connect with future inheritors.