From the December 2007 issue of Wealth Manager Web • Subscribe!

The Multi-Gen Client

As a financial planner, your career's success hinges on your ability to develop strong relationships with your clients by helping them reach their financial goals. But although you spend so much time and energy planning for others, many of you are failing to plan for the future of one very important party--yourself.

In an industry that is driven by long-term relationships, financial planners are at the mercy of one unavoidable occurrence: death. At some point, your clients will pass on, and without the proper plan, you will lose the assets you have worked so hard to protect, manage and grow over time. Financial planners and their firms must develop a proper plan to avoid the gradual drain of assets over time.

So, what is this proper plan that we need to develop for our businesses? Good financial planners tell their clients, "Failing to plan means you are planning to fail." The financial planners and firms that can create an effective system of securing the next generation of clients--even without looking beyond their existing clients' families--will prosper in the long run. Over time, these planners will benefit by successfully turning over their clientele without losing business.

The overall idea behind this plan is relatively simple. We must reach out to our clients' children, heirs and beneficiaries today--not down the line, not in a few years, months or even weeks. This is a plan you must begin developing now. Think about it: If there was ever a dream client, your client's children fit the description. You're already familiar with them through your clients' wills, trusts and retirement plans. Even better, you have the best possible reference to facilitate the introduction and help kick off the relationship--their parents. For years, you've asked your clients how their children are doing; now the time has come to turn this friendly chit-chat into serious dialogue.

What are some steps we can follow to foster these new relationships and develop this process for repetition? To begin, add your clients' children's names to your monthly newsletter and invite them to your client events. These are small steps that require little money or time, but they can help you begin to build a relationship. By sending your newsletter and invitations, you make subtle touches with your future "prospects." Every time they see these items, it fortifies your name in their minds. The content provided in the newsletter and from participation in your client events will only further reinforce your newfound relationship with your clients' children.

Moving on to the next stage, ask your clients to bring their children/heirs to your review meetings. At these sessions, be certain to sit down and go over any estate plan that has been made. You'll want to explain how the plan is set up, while discussing your clients' wishes regarding the legacies they are leaving their children. By inviting the heirs to these meetings, you have the opportunity to bring them into the planning process. They will gain a greater understanding of what it is you do and what it is you will be able to offer them in the future.

The last and most important step in your plan is to take advantage of your firm's younger professionals. Like it or not, most planners with 20 to 25 years' experience have a very difficult time relating to younger clients, which hampers development of the all-important rapport necessary to establish a long-term, professional relationship. By deferring to your staff's younger members, you can help set up a compatible relationship with long-term business potential between your client's children and your firm's younger financial planners.

Moreover, this is easy to accomplish: For example, Jane and Bill have been longtime clients of the firm--more than 12 years in fact. They are now in their late 50s and nearing retirement--as is the senior partner who has been the primary point of contact since he brought them into the firm. Now, however, this partner is beginning to think about his exit strategy while figuring out how best to maintain this [client] relationship, leverage his staff, and make sure these longtime clients continue to get the service and attention they warrant.

Enter junior staffer Michelle, who has worked closely with the senior partner from her first day in the business about five years ago. During this time, Michelle obtained her CFP designation and began to develop her own client base--albeit at a much smaller level than some of the other, more senior planners in the firm.

For several years now, Michelle has assisted Jane and Bill with administrative issues and has become familiar with their case, their situation, their goals and their objectives, and has already established a rapport with them. In this situation, transferring the relationship is fairly easy to accomplish because an excellent "base" has already been created.

The senior partner is solidifying Michelle's place in the client planner relationship by choosing to make her an active participant in annual review meetings and presenting her as "the other planner assigned to your case." Each time Jane and Bill come in to meet, Michelle is always in the meeting, as is the senior partner. But each time, she will take over a progressively larger portion of the presentation. The senior partner will "step back" more and more, so that by the third year of this process, he merely sticks his head in the door to say "hi" and see how the clients are doing. Michelle will be the primary point of contact for Jane and Bill, and the client relationship is essentially transferred.

This process takes a minimum of two to three years from start to completion. Rushing the process can make the client feel uncomfortable with change. And as we all know, change can create feelings of anxiety and nervousness--not exactly the qualities you want in your client base. It is also important to remember that while some clients are compatible with some staff members, others are not. If you have situations where the client's personality is a better fit with another staff member, do not hesitate to bring in another junior planner. That's the beauty of having several junior planners on staff. There are plenty of options to choose from when it comes to matching client personalities with the right planner. And of course, since no two firms are alike, each firm will have different processes and steps. Nonetheless, the key issue to recognize is that this matter is universal and critical to the long-term development of the firm's business.

As an added benefit, this process provides an opportunity for younger employees to grow professionally and personally. This will boost and maintain a high level of morale among your staff by providing challenges that encourage them to work competitively. In addition, your employees will feel empowered by the trust senior management has placed in them as they work with the parents and develop relationships with the next generation. These factors should improve the overall production of your business in both the short and long term.

As a financial planner, you make a living by developing the financial plans of others. By avoiding the development of your own long-term plan, you risk losing business that you worked hard to obtain. It's important to connect with your client's children now, while your client can assist in the recruitment process. If we truly believe our profession adheres to a fiduciary standard, why wouldn't we begin to assist our clients' children with the transfer of wealth from their parents? We would certainly be placing the interest of both our clients and their children first while allowing our practices to grow and prosper.

It's time that we took a small bit of time away from planning for others to make sure we secure our own organization's future. Financial planners must take the time to develop a plan now, or face the consequences in a future that comes closer and closer every day.

Brian T. Jones, CFP, is a vice president at CJM Wealth Advisers in Fairfax, Va. (, and the author of Getting Started: The Financial Guide for a Younger Generation.

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