Matt Featherstone
Northern Trust Asset ManagementEric Friedman
Chief Investment Officer, Northern Trust Wealth ManagementFor the fourth time, Northern Trust joined the Adviser 3.0 programme, bringing a transatlantic perspective on the future of financial advice. Eric Friedman, CIO of Northern Trust Wealth Management, shared insight from the world's largest wealth market: what UK advisers can learn from trends already playing out across the pond, and what they should approach with caution.
What we covered
The session moved through four key themes: the $84 trillion intergenerational wealth transfer underway in the US, the competitive landscape of the US advisory market, the role of alternative assets in wealth portfolios, and practical steps UK advisers can take right now to future-proof their practices.
Generational wealth transfer
$1.4 trillion moving between generations every year and what that means for adviser practices
The US competitive landscape
How the rise of independent RIAs maps to the UK, and what it signals for your positioning
Alternative investments
Why alts are dominating US adviser conversations, and why UK advisers may benefit from waiting
The service gap
The striking mismatch between what clients want (tax, estate, charitable planning) and what they receive
Evolving client expectations
Why younger inheritors distrust financial services, and how advisers can earn that trust
AI and technology
Why smaller UK firms don't need to be AI pioneers, and what a "fast follower" approach looks like
The great wealth transfer
The numbers are staggering. In the US, $1.4 trillion is transferring between generations every single year over the next decade, primarily from Baby Boomers to Gen X, with Millennials and Gen Z close behind. The prime recipients right now are those aged 46 to 61, but the wave is accelerating.
What's particularly interesting, and relevant for UK advisers, is what is actually being transferred. When asked in a live poll, most attendees guessed real estate. The reality? Privately held businesses account for 40% of the wealth being transferred, followed roughly equally by cash and equities, with real estate and luxury assets trailing behind.
"It's one thing to receive a couple of million dollars' worth of Tesco shares. It's quite different to receive a privately, closely held business that has all sorts of tax and ownership considerations., Eric Friedman
The implication for UK advisers is clear: business advisory capabilities, whether in-house or through a strong partnership network, are becoming a genuine differentiator. Clients receiving private business interests need more than portfolio management. They need expertise in valuation, succession, and tax structuring that most advisory firms don't currently offer.
Audience sentiment: the polls
We ran live polls throughout the session. Here's how the audience responded:
Which asset class will see the highest % inheritance in the US wealth transfer?
Real estate 68% (audience guess)
Equity holdings 19%
Cash & liquid assets 8%
Private assets 5%
The actual answer: privately held businesses account for 40% of assets being transferred, not real estate.
What % of US wealth advisers plan to increase alternative investment allocations over the next two years?
40% or under Most popular response
Reality: among ultra-high-net-worth focused advisers, 80 to 85% plan to increase alternatives. Among those serving sub-£1m clients, that figure drops to 35 to 40%.
The competitive landscape and the UK parallel
The US advisory market is fragmented, much like the UK. Wirehouses (think the UBS-equivalent global brokerages) hold around a third of assets, but the fastest growing segment is independent RIAs: fee-only, fiduciary-first, scrappy independent advisory firms. Over two thirds of these RIAs manage less than $1 billion in AUM.
This maps closely to the UK independent advice market. And the trend driving growth in the US: private equity consolidators buying up independent firms to create scale, and it is already beginning to arrive in the UK too.
"Independent RIAs really fly the flag of independence. The word 'fiduciary' is something they tout loudly. And that does resonate, especially against larger entities with a bank and asset management arm under the same roof."
The lesson for UK advisers: find your niche and be exceptional within it. Geographic strategy matters too. Eric pointed to the counter-intuitive finding that the highest concentration of personal financial advisers in the US is not New York or San Francisco, but Salt Lake City. Adviser density doesn't always follow population density; it follows legacy capital and local culture.
The service gap and the opportunity it reveals
Perhaps the most striking slide of the session showed the gulf between what clients want from their adviser and what they actually receive. Investment management ranks first, which is no surprise. But beneath it, the gaps are stark, covering tax planning, estate planning, wealth protection, and charitable giving are all heavily demanded and significantly under-delivered.
This gap exists in the US, but Eric was clear: it almost certainly exists in the UK too. And it isn't necessarily about hiring a team of tax specialists. It's about being honest about where your practice excels, identifying where demand exists that you're not currently meeting, and building partnerships where in-house capability isn't viable.
"There are things clients just assume they're not telling you about. But there are also things you probably have a competency in, or can at least help a client more than they can help themselves, that you simply have not built out yet."
Alternatives: a reason to wait
Alternative investments, including private equity, private credit, hedge funds and real assets, are consuming a disproportionate share of conversations in the US advisory space. Among ultra-high-net-worth focused firms, the vast majority are actively increasing allocations. Eric was candid about the dynamic: it's part genuine client demand, part industry product push.
His advice to UK advisers? Let the US go first. The "democratisation of alternatives", bringing strategies previously available only to institutional investors down to retail wealth clients, has already produced some poor outcomes in the US. The better solutions will emerge over time. For now, Eric recommends a Rolling Stones approach: wait for the greatest hits, not every release.
"Let us shave on our faces before we shave on yours. In this category, there have already been a number of issues. Be a sifter through the industry challenges versus jumping in too early." Matt added that the UK platform ecosystem, with its fractional dealing costs and ETF limitations, also makes access harder practically for now.
The next generation of clients
Gen X, Millennials, and Gen Z are inheriting wealth with very different expectations than the clients advisers are accustomed to. They've lived through the dot-com crash and the 2008 financial crisis. They're sceptical of financial services by default. Trust, for this cohort, isn't built on reputation. It is built on proof.
What they want from an adviser is also shifting, moving away from pure investment management and towards what Eric called "life management": a holistic, personalised service that meets them where they are, communicates with the frequency they expect, and is transparent about how things work.
Consumer expectations are no longer set by financial services. They are set by everything else: delivery apps, messaging platforms, on-demand services. If an adviser's engagement frequency and communication quality doesn't match what clients experience elsewhere in their lives, someone else will fill that gap.
Questions from advisers
Is millennials' preference for alternatives a genuine mindset shift or a product push? Both, says Eric. There's an industry product push that resonates with millennials partly because of branding, but there is also a genuine behavioural driver. Older millennials have seen traditional asset classes fail at the worst times for their families. They're responsive to the idea of diversifying beyond the conventional.
Should small UK firms build AI in-house, buy off the shelf, or just partner? Go off the shelf first. Use tools like Copilot, Perplexity, or Claude for presentations, client communications, and research. The more wealth-management-specific AI tools, including account roll-up, exposure analysis and financial planning enhancement, are still being built. Be a fast follower, not a pioneer. Keep an eye on the Kitces fintech map for what's emerging.
Which US trends translate directly to the UK? The service gap between what clients want and what they get is real here too. So are generational preference differences. Alternatives and the specific fintech consolidation trends are probably slower to translate, given the UK ecosystem.
If you could borrow one thing from the US playbook right now, what would it be? Eric's answer: the entrepreneurial approach to defining your practice's scope of excellence. American advisers are very clear on what they're exceptional at, and they build deliberately within that. "You don't have to be all things to all people. Be excellent at the ones you select."
