Another Challenge When Working With Seniors: Their Children

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Even though many advisors have built trusted relationships with their senior clients, many have started to see these seniors bring in other family members to help make difficult decisions about their financial plans.

“While they know and trust us, they want some third-party confirmation in addition to their advisor,” says David Bryant, an agent with Farmers Financial Solutions, Tulsa, Okla.

Bryant adds that some senior clients are bringing in their friends, their children or even their nieces and nephews. “We have people coming in saying that their nephew reads the business section of the newspaper every day and they want him involved in their investment decision,” he says.

Advisors agree that when clients bring in other family members it can present a number of different challenges. In some instances, when a client brings in an adult child to help make investment decisions, the child has a different objective than the parent.

“Ive seen this frequently; the children have a different agenda,” says James Jacobs, a financial advisor with Jacobs Financial Group, Chesterfield, Va.

In these situations, the senior may have a large retirement account that needs to be tapped for income purposes. The younger generation sees this account value as a potential inheritance and is concerned that his or her parents will spend it all during their retirement, Jacobs explains.

“They [the children] want the account to grow and accumulate while the senior citizen wants income with more guarantees,” he says.

Jacobs adds that the challenge hes faced in this situation is educating the children as to why he is recommending certain actions over other alternatives and where it all fits into the financial plan.

“Not only do you have to advise, educate and build rapport with your client, but you have to educate and build rapport with someone who you may not have a history with,” adds Bryant.

Planners have had both good and bad experiences when working under these circumstances. Bryant has had situations where people have full and complete confidence in him, but hes also had instances where people have taken their business to someone else.

In one situation, Jacobs senior clients asked him to speak with their daughter about their financial planning. “She called me on the phone and she was very adversarial,” he says.

Apparently his clients daughter had developed some attitudes about the use of annuities, he says. She had a strong bias against all kinds of annuitiesdeferred, immediate, fixed, variable, every kind of annuity available. Jacobs felt that she just didnt have a full understanding of annuities, so he spoke with her, sent her some information on the product, and explained how it works and where the product fits best.

“In the end, my clients told me I could send her some information but not to tell her what they had,” he says. In many instances, he notes, seniors involve their children just to appease them.

While advisors admit there are challenges involved when working with a seniors other family members, most have stated that they feel it develops into a positive experience. And despite the adversarial experience Jacobs encountered earlier, he welcomes the next generation coming to see him on their parents behalf. “Im delighted to meet with other members of the family because it helps solidify the relationship. When something happens youve got a better opportunity to continue the relationship with the family,” he says.

Jacobs estimates that 80%-85% of the time when he builds a relationship with other family members, they become clients.

“Its more than a new prospect, its a chance to continue the relationship,” he says.

In situations where Jacobs hasnt built a relationship with other family members, often the future business goes somewhere else.

While building a relationship with a number of family members takes a little extra time and effort, Bryant says it usually leads to more business down the road.

“If you do a great job, fully educate them and act in the clients best interest, then when it comes time for that money to change handsas ultimately it willyou have a built-in client,” he says.

“I welcome and appreciate other family members being involved,” says Russell Crook, president of Crook Financial Services, Red Bank, N.J.

Crook explains that when other family members are involved and have a full understanding of the planning process, it reduces the likelihood of them being critical of his plans at a later date.

“One thing I dont want is someone coming in later and second guessing everything,” he says. “That can make it very uncomfortable and unpleasant. Full disclosure to all parties involved is the best way to go.”

Crook compares this to his own situation, where he looks after his mothers finances. “If something was going on that I wasnt made aware of and I found out about it later, Id be upset about it,” he says.


Reproduced from National Underwriter Life & Health/Financial Services Edition, November 14, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.