Why the Great Wealth Transfer's Biggest Beneficiaries Aren't Happy With Advisors

“In 2044 … minorities will account for more of the U.S. population than white Americans. Clients that have been underserved historically are now taking over the majority of the wealth transfer and creation of wealth,” argues Lacy Garcia, founder and CEO of fintech firm Willow.

The platform’s mission is to ensure that women — the largest segment of the new majority — are better served.

“Over the next decade, women represent the biggest opportunity for financial advisors because they’re the biggest beneficiaries of The Great Wealth Transfer,” she maintains in the interview.

However, research suggests that female clients, in general, are unhappy with the way advisors have treated them, and “Black and Latina women are three times more likely to say that financial services does not meet their needs or that they have had a bad experience when they first became investors,” Garcia says.

Meanwhile, demographically, the growth of underrepresented populations is outpacing the growth of white Americans.

In fact, during the last five years, the affluent Black segment has seen 65% growth.

But “there’s a big disconnect,” Garcia says, because minority clients are those who historically have been the most dissatisfied with financial services.

In the interview, Garcia, a second-generation Cuban American, digs into these issues and rates the industry as to how they’re helping female advisors succeed.

She argues that firms and advisors need to escalate their attention to diversity and potential new-majority clients because these women and men care whether a firm or advisor is “a champion of workplace diversity and equality.”

Willow helps firms and individual advisors better serve women and underrepresented groups, and modernize financial advisors’ practices. It holds practice management seminars and conducts coaching that certifies advisors, who then are eligible for new-client introductions that Willow provides.

ThinkAdvisor recently interviewed Garcia, who was speaking from Willow’s headquarters in Boston.

She founded the firm in 2019 after holding posts with Deltec as head of marketing and Weber Shandwick, where she was lead strategic advisor.

Here are highlights of our interview:

THINKADVISOR: What should advisors have top of mind right now?

LACY GARCIA: To succeed in the future, advisors need to learn how to connect with, educate and empower the new majority.

What’s the new majority?

Clients that have been underserved historically are now taking over the majority of the wealth transfer and creation of wealth.

The growth of underrepresented populations — Hispanic and Latino, Black and African American, Asians, Pacific Islanders — is outpacing the growth of white Americans.

When will minority groups become the new majority?

In 2044, we’re going to reach the majority-minority movement where collectively, all the groups that are minorities will account for more of the U.S. population than white Americans.

Therefore, diversity [especially women] is the biggest opportunity for growth in the wealth management sector to help advisors grow their business.

Over the next 10 years, the greatest opportunity is women because women are the biggest beneficiaries of The Great Wealth Transfer that’s taking place.

What might advisors not have realized?

There are many ways the new majority has been untapped. People of color have been underserved. But the number of affluent households in underrepresented communities has grown at 1.4 times [that of] the general population.