You just inherited $500k or more, part of a $124 trillion (!) coming wealth transfer. Here’s what to consider when deciding how you want the money managed.
It may well be the greatest wealth transfer in human history.
And it’s happening during our lifetime…
An enormous wave of wealth transfer, $124 trillion, is coming.
A new Harris poll quotes a projection from wealth management researcher Cerulli Associates, estimating that in the next 24 years, a staggering $124 trillion in personal assets will change hands.
And yes, that’s not a typo, it really is “trillion” with a “t” – nearly 84% of the $147.7 trillion value of US private-sector wealth, according to Barron’s!
Cerulli expects about $45.6 trillion to go to Millennials by 2048, an average of more than $614k each! Another $39 trillion will be inherited by Gen X, an average of more than $600k each.
In the shorter term, by 2034, Gen X is expected to inherit $14 trillion, about $215k each, while Millennials will get “only” $10 trillion, or $135k each, on average.
Even Gen Z isn’t left out of the party, expected to inherit over $15 trillion by 2048, averaging more than $216k each.
Boomers will receive the smallest portion of the pie, at $5.5 trillion, or $72.5k each, on average.
| Generation |
Expected Total Inheritance (trillions) |
Average Inheritance per Person |
| Baby Boomers + (age 61 and up) |
$5.54 |
$72.5k |
| Gen X (age 45 – 60) |
$39.02 |
$600k |
| Millennials (age 29 – 44) |
$45.61 |
$614k |
| Gen Z (age 13 – 28) |
$15.16 |
$216k |
The Harris research team surveyed affluent (at least $1 million in total investable assets) older Americans (aged 55 and older), and younger Americans (ages 18 to 54) who expect a sizeable bequest ($500k or more). They asked multiple questions, including:
- Who do you plan to leave your bequest to?
- What’s the primary purpose of your wealth?
- What are your top investment goals?
- How well do you feel your family (for older Americans) or you (for younger Americans) are prepared to manage inherited wealth?
- Do you plan to move your inheritance from its current asset manager?
- What drove your decision to keep/change asset managers?
When ownership of such vast wealth changes hands, it shouldn’t surprise anyone if heirs use their new control differently.
Why “You’re Fired!” Is Becoming Common
It may have gained notoriety from reality-TV boardrooms, but when it comes to their parents’ long-time financial advisors and asset managers, saying “You’re fired!” hides a wide range of emotions, gut-level reactions, and money attitudes.
According to Harris, more than four in ten (43%) Americans poised to inherit significant wealth plan to fire their parents’ financial advisor and asset manager.
For some, it’s about a fresh start, others may reject outdated practices, and yet others want to exercise their newfound “power of the purse.”
But, whatever the reasons, one thing is clear. The coming wealth transfer wave will wash away a lot of the “business as usual” in the wealth management sector.
Even if you aren’t expecting a massive inheritance, there are useful lessons to be learned about which (if any) financial advisor to hire, retain, or fire, and what you may want to negotiate up front.
Seeing the writing on the wall, many advisors and asset managers are scrambling to figure out what younger generations will want in their advisors. They’re modernizing their communication tools and style, developing new service offerings, and reconsidering their pricing models.
But if you’re one of these heirs, the question remains: Will you stay, switch asset managers, or negotiate a deal that matches your goals, philosophy, and expectations?
Is firing your parents’ advisor a smart way to rebel, or an expensive protest that will backfire?
Here’s Why Many Heirs Fire Their Parents’ Old Advisor
Given that Mom and Dad’s old advisor likely helped them build and manage the wealth being inherited, why do more inheritors plan to fire that old advisor than those who’ll keep him or her?
Unsurprisingly, given the amount of money involved, it’s a mix of strong emotions, values, relationships, and bottom-line dollars.
Values mismatch. Just because your parents were happy with traditional investment strategies like 60/40 stocks/bonds, seeking to maximize risk-adjusted returns, doesn’t mean you feel comfortable with that. Perhaps you want to vote with your investment dollars for environmentally aware companies, which support social causes you resonate with, and that run their business to the benefit of all their stakeholders, including employees, not just managers and shareholders. If your parents’ asset manager dismisses that approach as contrary to their mission of making you as much money as possible with as little risk as possible, it’s clear that you need to change horses.
Personal connection? With whom? Your parents may have had a great personal connection with their advisor, but you may have never met the man (or woman). If the advisor never suggested to your parents that it would be beneficial to have you join at least some meetings, you’d be perfectly justified in going elsewhere.
Fees and transparency. Many advisors charge annual “Assets Under Management” (AUM) fees, usually 1%, and clients have gotten used to it. If you inherited $500k, you’ll pay $5k. However, as your portfolio grows, so does their cut. At $1 million, they’ll take $10k, at $5 million, they get $50k, and so on. It’s simple math, but does an asset manager work ten times harder managing $5 million than $500k?
Communication expectations meet insufficient offerings. Your parents may have been happy with a printed annual report, possibly with a brief meeting to review its main points. Younger Americans prefer to be much more hands-on, with an online portal where they can track their portfolios daily in a digital dashboard, in-person meetings monthly or even weekly, and possibly multiple times a week phone or Zoom check-ins and Q&A sessions.
New wealth = new start. Inheriting money comes with complex emotions, often including grief, sadness, and possibly some guilt. Moving to a new asset manager can be a way to signal to yourself that, for better or worse, it’s now your money to manage.
Here’s What You May Gain by Moving Your Money Elsewhere
Regardless of your reasons for moving your inheritance to a new asset manager, there are some real advantages, both emotional and practical.
Improved alignment. Your parents’ money was managed in line with their financial outlook and ideals. That was them. This is about you. You can pick a new advisor who will honor your investing philosophy.
Updating the portfolio. When they were alive, your parents needed a portfolio that fit their financial goals, risk tolerance, and stage of life. Their manager may have been outstanding at managing their money in a way that reflected all those. That advisor may or may not be a great fit for managing things in a way that works with your financial plan, goals, ideals, and risk tolerance.
Your relationship, on your terms, meeting your expectations. When picking a new advisor, you can verify that they tick all your checklist boxes. You can set your expectations regarding real-time online access to your portfolio data, periodic performance and market outlook reports, investment philosophy, services included, and fee structure. With an advisor you picked, you’ll never have to deal with, “When your dad was alive, we always…” or “When your parents were around, we never…”
Switching advisors isn’t necessarily about “firing” your parents’ advisor and rejecting the past. It’s mostly about making sure you have an advisor with whom you can build a relationship that honors what’s important to you.
As Always, Pros Come with Their Cons…
You may be ready to pull that trigger and fire your dad’s old advisor, but first, here are some risks and drawbacks you need to consider.
Institutional memory loss is a thing. Your parents’ advisor worked with them for decades and knows your family’s “money DNA.” You may not realize what money attitudes you learned from your parents, but their advisor probably knows, along with why each asset was purchased, and the money mistakes your parents regretted (so you don’t repeat them).
Money doesn’t have emotions, but people do. Firing the old advisor may give you a quick thrill of a fresh start or of control, “sticking it to the system,” if you will. The problem is that changing advisors may result in real-life practical costs, like unnecessarily triggering taxable events and/or transaction fees. Make sure you don’t end up “Cutting off your nose to spite your face,” as the saying goes.
Track record matters. The old advisor may have lagged the market, even in risk-adjusted terms. On the other hand, he or she may have generated high risk-adjusted returns over 20 years or more net of fees. If you move to a new advisor, make sure you aren’t going from a champion to a laggard.
Wholesale revision of your portfolio bears costs and risks. If you move to a new asset manager who will recommend selling all of your parents’ old assets, buying new ones, a wholesale “asset repositioning,” pay attention. This sort of recommendation may be justified, especially if your parents were hyper conservative and you’re much more risk-tolerant. However, in many if not most cases, there’s little justification for changing core assets. Doing that may needlessly generate transaction fees and a taxable event you’ll need to deal with when filing that year’s taxes. If your new advisor isn’t a fiduciary (more on that later), you’ll need to be especially careful to avoid high commissions and/or complex and opaque investments. These may be pushed on you to better reward the advisor (if their fee structure includes commissions). You may also be on the receiving end of assets that haven’t been accurately “marked to market” and are being disposed of from the portfolios of the advisor’s wealthier clients.
Your Power Move – Negotiate Before Deciding
There’s an old saying, “Decide in haste, repent at leisure.”
Sometimes you have to make a snap decision. This isn’t such a time. With the inheritance now in your name, you’re in the driver’s seat.
Nothing will happen until you decide it’s what you want.
As long as it was your parents’ money, it was all about what worked for them. Now that it’s your money, it’s all up to you. Now, prospective advisors, whether your parents’ old one or others, have to earn the right to manage your money.
Whenever you make a major purchase, be it a car, a college for your kids, or a home, you research, comparison-shop, and assess pros and cons. Only after you have all the information in hand do you make the decision.
This should be no different.
In many cases, the inheritance may be the largest financial event in your life, worth far more than even your home.
Instead of making a snap emotional decision to fire (or keep) your parents’ advisor, do your due diligence. Research options. “Put it out to bid,” if you will. See what several advisors offer in terms of all the things that matter to you, including, but not limited to:
- Investing philosophy
- Communications
- Fees and transparency
Here are some important questions to address when deciding whether or not to fire your parents’ financial advisor:
- What’s their investment philosophy? Does it align with your values (such as ESG investing), risk tolerance, goals, and time horizon?
- How do they keep clients informed? Is there an online dashboard you can access 24/7? Will they send you performance reports and market outlook advisories monthly or quarterly? How often can you call or email with a question, and how quickly will they respond? If they can’t commit to confirming receipt of your question within one business day and sending an answer as soon as possible, given the complexity of the question, find someone else.
- What’s their fee structure, and do they charge AUM fees? How high are they? Do they decrease as your portfolio size increases? If you go with an AUM-based fee structure, make sure you’re comfortable paying more when your portfolio grows, even if the manager does nothing different or more difficult. You may prefer a flat-fee structure. If you can’t find an advisor who will do that, can you keep core parts of your portfolio in, e.g., low-cost index Exchange-Traded Funds (ETFs) outside of the assets they manage, to reduce your AUM fees? If yes, will they still tell you if and when they think you should change those core assets?
- What services do they include? Will they update your financial plan annually, as well as whenever there’s a significant development (think a new kid, a big promotion, job loss, medical issues, and more)? Do they offer a free estate plan?
- What parts of your parents’ portfolio would they recommend you keep? What would they change, to what, why, how quickly, and what would the tax and fee implications be? If they say they would change everything right away, especially if they receive commissions, that’s a big red flag.
- In the spirit of taking things slowly, consider keeping some or most of the inheritance with your parents’ advisor at first, moving the rest plus any new investments to a new advisor. Then, over time, compare the two advisors’ performance, costs, and service level. Then, if one is significantly better, you can consolidate your portfolio with that advisor (possibly keeping your core positions in low-cost ETFs outside of your managed portfolio). If you do this, make sure the two advisors will communicate and coordinate strategies to avoid information siloing that could lead to over-concentration in one type of asset, or completely missing some other type.
- Is the current or new advisor a fiduciary? This means he or she must put your interests above their own. Working with an advisor who is not a fiduciary risks getting stuck with underperforming investments that were picked to best pay the advisor, rather than best suit you.
Asking these questions and not shying away from negotiating anything you don’t like lets you “flip the script.”
Instead of being stuck with an advisor you inherited along with the money, you get to decide what works for you. You set the tenor of conversations to match the reality – you’re the one with the money, and you get to pick who will manage it for you. The advisors are the ones auditioning for your business.
Advice from the Pros
I asked financial professionals for their best advice on how you should pick an advisor, what red flags to be wary of, and how they’d respond to someone concerned that hiring an advisor is simply an expensive way of achieving investment returns that are no better than the broad market.
Here’s what they had to say…
Arielle Tucker, CPF®, EA, Founder of Connected Financial Planning & Host of Passport To Wealth™, advises, “When you inherit wealth, the most important factors in choosing a financial advisor are alignment and expertise.
“You need someone who understands your goals, life stage, and complexity. Many advisors specialize, whether it’s retirement income planning, equity compensation, or cross-border tax issues, so make sure your situation falls within their area of expertise. The advisor who helped your parents may not be the right fit for you.
“Always confirm they’re a fiduciary, which means they are legally obligated to act in your best interest. It’s a simple but powerful safeguard. If the advisor can’t explain their fees clearly, doesn’t ask about your goals, or tries to maintain your parents’ investment strategy without reassessing your needs, those are all major red flags, and it’s time to ask more questions.
“As for AUM fees, while critics argue you could do it yourself and save money, a great advisor helps you avoid costly mistakes, stay invested during downturns, manage taxes effectively, and make smart, long-term decisions. The real value often comes not from beating the market, but from helping you avoid behaviors that sabotage your returns.”
Brennan Decima, Owner, Decima Wealth Consulting, weighs in, “Whether you retain an existing financial advisor or hire a new one boils down to three things. First, it’s critical to have a fiduciary who acts in your best interest, not someone working off commissions or big broker sales goals. Second, you should find someone who not only listens to your concerns but also understands your priorities and purpose with the inheritance. Finally, you need to make sure the advisor’s philosophy aligns with yours.
“The single biggest red flag I’ve seen for clients who inherit money is if the advisor pressures you to act quickly after the loss of your loved ones. When this happens, it’s important to ask yourself why there’s such urgency. An advisor experienced with clients dealing with grief understands it’s overwhelming and emotional, and quick decisions often lead to future regret or second-guessing.
“Someone who suddenly inherits wealth often feels pressure to be a good steward of the new fortune. Doing that on your own can be paralyzing. The cost of mismanaging the inheritance can often be much more expensive than the cost of professional management. A good advisor builds a plan that balances investment returns with peace of mind, so the money enhances your quality of life, rather than hindering it.”
Jonathan Dane, CFA, CFP, Founder & Chief Investment Officer, Defiant Capital Group, says, “When inheriting wealth, it’s important to choose an advisor who can address both your immediate needs and issues you may not yet be aware of. Inheritances often carry complex tax implications, particularly with inherited IRAs, where withdrawals taken too quickly or invested improperly can significantly reduce long-term performance and diminish wealth intended to pass across generations. You want an advisor with deep expertise in tax liability and optimization, with strategies to help minimize those costs.
“It’s also important to look beyond investment management. The right advisor is someone who can grow with you, offering the breadth of experience to manage your wealth well into the future. We remind prospective clients that it’s often less about the firm’s brand name and more about the individual advisor’s judgment and alignment with your interests.
“Finally, make sure any advisor you consider is truly fiduciary-minded and not incentivized to push high-commission products or strategies that may not be in your best interest. Maintaining control and access to your assets is central to true financial freedom. We always caution clients to fully understand what they are giving up when they commit to any investment product or planning vehicle that limits liquidity. That means carefully evaluating the risks and return potential of options such as annuities, private investment vehicles, or long-term mutual funds that do not provide daily access to capital.
“Another red flag is when advisors aggressively push clients to transfer assets before even developing a financial or wealth plan. A sound process begins with planning, not asset gathering. Clients should be wary of any advisor who prioritizes custody of their money over building a comprehensive strategy. Finally, tax optimization is critical. Investors should review the types of investments their advisor is recommending and whether the income generated will be taxed at qualified dividend rates or at higher ordinary income rates. Poor tax planning can significantly erode the overall return of a wealth strategy.
“True wealth advisory is about far more than investment management. If a potential client interviews an advisor and all they discuss is investment performance, that client is missing the full value they should expect. Advisors can earn their fee through the additional consulting they provide in financial planning, estate strategies, and tax optimization. One well-timed portfolio adjustment in a down market can offset an entire year’s advisory fee. Similarly, a single tax strategy, whether that’s the timing of a Roth IRA conversion, optimizing withdrawals across retirement and taxable accounts, or structuring income for tax efficiency, can generate value that exceeds the cost of advice. Every client should look at the broader value their advisor provides. True wealth advisory must integrate investments, estate planning, and taxes.”
Joseph Carbone, CFP®, Founder and Financial Planner, Focus Planning Group, agrees with his colleagues and adds some important points, “Some key considerations when inheriting money and hiring a financial advisor include, first, working with a CFP who is a fiduciary. Second, ensure they’re transparent about the services they will provide and their fee structure, preferably laid out in plain English on their website. Finally, you need to decide if you want to work with an advisor on an hourly or consulting basis, manage the inherited assets on your own, or want a firm that will manage your inherited assets for you. Then, ensure you talk with firms that offer services aligned with your goals and preferences.”
Chad Holmes, CFP®, Founder of Formula Wealth, recommends, “If you have your aging parents’ financial power of attorney, it’s time to find your preferred advisor NOW. There is tremendous value in proactively planning for the inheritance. Once they pass, you ‘get what you get,’ and most of the levers are no longer available to pull. Find an advisor who specializes in multigenerational planning so you can see the REAL value in long-term financial planning.”
Will You Fire Your Parents’ Financial Advisor?
Sometimes protesting something can lead to positive change. Other times, you may end up paying a price you didn’t anticipate.
With the wealth you inherited comes greater financial freedom, but also the responsibility to manage it prudently. You may feel tempted to snap, “You’re fired!” and walk away from the person who managed your parents’ money for them.
However, instead of following the herd, you would be better served by being more deliberate, doing your due diligence, and basing your decision on the information you collect, along with your gut feeling. Don’t let the spirit of rebellion stick you with huge headaches down the line in the form of lost institutional memory, tax liability, transaction fees, and more limited investment options.
Your inheritance may be the largest financial event of your life. Handle it as if you’re the CEO of your wealth, just like a company CEO would consider with great care any merger, acquisition, or divestment.
Ask all the right questions. Make sure you understand the answers. Negotiate whatever doesn’t work for you. Consider a sort of A/B test, comparing two options over a substantial period of time, then deciding which of the two works better for you.
Even after you decide and act, if things don’t work out the way you hoped, all is not lost. You can still take your money elsewhere.
Remember, the real power isn’t just snapping out, “You’re fired!” just because you can.
It’s in taking the time to make the right decision, so you end up keeping a stellar advisor or leaving a less-than-stellar one, regardless of whether it’s your parents’ old one or not.
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Disclaimer: This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.
About the Author
Opher Ganel, Ph.D.
My career has had many unpredictable twists and turns. A MSc in theoretical physics, PhD in experimental high-energy physics, postdoc in particle detector R&D, research position in experimental cosmic-ray physics (including a couple of visits to Antarctica), a brief stint at a small engineering services company supporting NASA, followed by starting my own small consulting practice supporting NASA projects and programs. Along the way, I started other micro businesses and helped my wife start and grow her own Marriage and Family Therapy practice. Now, I use all these experiences to also offer financial strategy services to help independent professionals achieve their personal and business finance goals. Connect with me on my own site: OpherGanel.com and/or follow my Medium publication: medium.com/financial-strategy/.
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