With the first 1.1 billion baby boomers reaching their 80th birthday this year, the advisory business is ripe for disruption as beneficiaries decide who will manage their inherited assets, and this, the start of the Great Wealth Transfer ( GWT ), in which tens of trillions of dollars will change hands, is reshaping what Asia-Pacific investors want from advisers, according to a recent report.

Notably, 48% of advisers in Asia-Pacific believe the GWT poses an existential threat to their business and 40% are already reporting that they have lost substantial assets due to generation attrition, finds Natixis Investment Managers ( Natixis IM )’s Great Wealth Transfer Report, which unpacks the factors that it says will help determine who survives and who thrives amid the transfer.

Asia-Pacific investors, the report shows, are more likely overall to be a flight risk from their financial advisers, compared with global averages. Baby boomers are the most likely to have already moved, or plan to move, assets to a new adviser ( 71% in Asia-Pacific versus 66% globally ).

Gen X2 and millennial investors in Asia-Pacific are almost equally likely to say they will keep their assets with the same adviser – with 43% of Gen X and 40% of millennials agreeing, compared to 48% of Gen X and 50% of millennials globally.

While money management performance ranks as a top reason for why Asia-Pacific clients stay with the adviser ( 20% ), it has little to do with why they leave. Only 10% of those surveyed say they are leaving because the adviser didn’t manage their parents’ money well.

As such, 75% of advisers in Asia-Pacific surveyed say the best strategy for retaining assets around wealth transfer is long-term relationship building across the family.

However, it is important to note that only 53% of individuals globally ( and 48% in Asia-Pacific ) say they have actually included their family in the estate planning discussion. That proportion is even lower in Japan ( 32% ) and Hong Kong ( 34% ), where families may not feel comfortable discussing the mortality of parents.

Generational differences shape what investors want

Unlike Baby Boomers, the interests of younger investors surveyed lean towards specific asset classes and product structures, most notably in terms of private assets, cryptocurrencies and active exchange-traded funds ( ETFs ). As such, advisers will need to be well versed in the workings of each and have clear strategies for integrating new asset classes into client portfolios. In Asia-Pacific, the report details:

• Baby boomers are the most conservative, with just 38% saying they are willing to take risks in order to get ahead. This cohort have the lowest appetite for investments in private assets ( 30% ) and cryptocurrencies ( 21% ).
• Gen X falls in the middle, with 52% saying they are willing to take risks in order to get ahead. While 42% say the more they read about private assets the more they want to invest, and 38% are planning to invest more, or begin investing, in cryptocurrencies.
• Millennials are the least conservative, with 78% saying they want to have the opportunity to beat the market. They also show greater interest in private assets ( 53% ) and 44% say they plan to invest or invest more in cryptocurrencies in the next year. When it comes to active ETFs, millennials are already predisposed to the concept, as 67% say they wish the mutual funds they like were available as ETFs.

Beyond generational differences, gender also shapes adviser preferences. Across geographies, women report being acutely aware that they are at a disadvantage when it comes to retirement savings as a result of longer life spans and time out of the workforce as caregivers.

Despite this concern, the gap between women ( 54% ) and men ( 49% ) in Asia-Pacific who believe it will take a miracle to achieve retirement security is fairly small, albeit higher than the global average of 48% of women and 39% of men.

Women are more likely to be conservative in their investment preferences, with 80% of women in Asia-Pacific saying that if given the chance, they would choose safety over investment performance, compared with 71% of men.

This suggests that when working with women as heirs, advisers may want to prioritize longevity planning, healthcare funding and volatility management.

Appetite for auto-advice shifting

Advisers looking to earn their business by retaining legacy assets should recognize that more technologically savvy generations have a greater level of trust in tech than others.

In light of advances in artificial intelligence ( AI ), 68% of millennials and 58% of Gen Xers say they are more likely to use automated advice. On the flip side, just 44% of boomers are interested. Performance potential is a key reason for this, as 59% of Asia-Pacific millennials say that AI represents the biggest investment opportunity of a lifetime.

However, even as next-generation investors lean into AI and digital advice, they still don’t put the same level of trust in machines as they do in real-life investment professionals.

Millennials ( 89% ), Gen Xers ( 85% ) and boomers ( 91% ) are still most likely to trust their financial advisers when making decisions. They also recognize that investment needs are personal and require personalized advice.

As such, Asia-Pacific investors broadly agree on the most important facets of their relationship with advisers, which are to give them financial planning advice ( 52% ) and help them understand investing ( 44% ).

“The Asia-Pacific region has seen remarkable wealth accumulation over just a few decades, and the coming great wealth transfer will be a defining inflection point for the industry,” says Dora Seow, Natixis IM Singapore’s CEO. “Younger heirs bring a different mindset – they are more tech-native, more open to alternative investments, and with distinct expectations around service and engagement. The conversations ahead must go beyond estate plans and family trusts and be tailored to the next generation’s unique outlook and preferences.”