Boomers spend the inheritance, advisors feel the drain

A Boston firm describes client withdrawals of around 4% as a giant drain on the business, and a Moss Adams consultant cited by RIABiz argues that hungry boomers are spending their children's inheritance — which makes the question of whether the Great Wealth Transfer is a mirage a useful frame for estate-planning marketing and a poor one for the practice ledger. Four percent of AUM leaving every year strips the fee base as surely as a bear market and with none of the panic, because a bear market recovers and a withdrawal does not; the Boston firm's complaint is the revenue side of that arithmetic, and the Moss Adams picture is the behavioral side.

The Moss Adams observation is the harder part. The Great Wealth Transfer, as the industry has told the story, was supposed to deliver a next generation of clients holding inherited accounts; if boomers are instead consuming the principal, the succession math changes, because there is no next generation of assets to land, only a conversation about what the parents spent, and a firm's intergenerational story stops being about asset transfer at all.

The practice answer is to turn the behavior into the engagement. Decumulation is becoming a line of work in its own right — fixed planning fees, income-floor models, spending guardrails — and the 4% drain is the covered cost of that engagement rather than a shrinking revenue line, the probability-based, mental-bucket work this publication has argued replaces deterministic withdrawal rules. The Boston firm's drain joined to the Moss Adams spending pattern is the empirical case for that work, which means asking the client what the money is for and building the income floor around the answer; the advisor who skips the psychology question will watch the plan get spent in ways the models did not anticipate. The pricing question is straightforward: the client is paying for the plan, not for the privilege of being counted.

The sharper reading is that the transfer was not a mirage but a change of beneficiary: the money is flowing, just from the estate plan to the boomers' own spending, and the revenue model built on the balance that remains runs counter to that flow. A firm that prices the spending plan keeps the relationship and earns the referral — RIABiz filed the report under the headline 'Client Referrals' — and in the decumulation era the satisfied withdrawer is the source of the next client, the drain itself serving as the referral fee.