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Positioning for the Great Wealth Transfer

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With trillions of dollars in liquid assets coming out of retirement accounts or transferred to the next generation in the coming years, many advisors are trying to get a fix on how to tap into that flow of liquidity. Mark Kaizerman has positioned himself to take advantage of the opportunity through a simple yet ingenious approach: creating a guide, clients can use with their advisors to identify and organize important documents needed for beneficiaries or heirs.

The guide, Beneficiary Directory, is Kaizerman’s passport into the relationship with the client, one which gives him access to the next generation as well. It was, he says, the answer to the question, “How do you become the one advisor that trumps them all?”

Kaizerman, who is also a CPA, formed his eponymous firm in 1994, in Natick, Massachusetts. The “tremendous peace of mind” to the spouse provided by the workbook, and the feeling that the financial advisor is the one go-to person–not the lawyer, not the life insurance agent–in the event of a death “creates a powerful client relationship that doesn’t fluctuate with market conditions,” Kaizerman says.

If you are doing financial planning, you need more than an investment deal to have as a basis for a relationship, he asserts. A tool like the workbook helps cement that relationship. The book, which he says has sold between 6,000 and 7,000 copies, is being used by advisors “as a tool to position themselves in what is the greatest transfer of wealth in history.”

The directory points the client toward locating, updating, and cataloguing the location of all important documents such as birth and marriage certificates and military discharge papers that are necessary to transfer benefits when a spouse or parent dies. Sound simple? Kaizerman says that 80% of husbands do not know where their original marriage certificate is, and 90% of wives cannot locate their husband’s military discharge papers, according to a poll conducted by his firm.

Kaizerman & Associates does more work now on distribution planning for clients where before the firm’s focus was “grow’em and grow’em,” he says of clients’ assets. The most valuable service we can provide is what to do if something happens to them through the “Go-Go, Slow-Go, and No-Go” phases of retirement, he notes, borrowing a phrase from author and fellow CFP Michael Stein.

Kaizerman likes to focus is on providing for long-term care (he is certified as an LTC planner) and avoiding too much of a tax burden at retirement. He says that 50 is the age for clients to begin planning for long term. There are a host of options designed to meet any budget, he says. Kaizerman’s average client has $850,000 to $1 million in assets for investment, and the firm offers fee-based services using separately managed accounts.

“I do not control investment returns or the market. I hire portfolio managers–we a rent a stock picker,” Kaizerman says. Incoming clients are required to have $500,000 in assets to invest, but once they are taken on, their parents and/or children do not have to meet that minimum, part of Kaizerman’s strategy for establishing intergenerational client relationships. He might actually do some commission-based work for those clients, he says.

“I have parents all the time who come in and say, ‘Chat with my son who just got his first job’ about his 401(k), life insurance, etc. You bet I want to do that meeting–and we do that meeting for free,” since that young man will inherit his parents’ real estate and gain the proceeds from their life insurance. “We will have him for life,” says Kaizerman.

What’s the secret to growing and managing wealth? “Boring, practical asset allocation strategy–cash, bonds, and equities,” says Kaizerman, noting that even the commission-based clients (the kids) get an asset-allocation in mutual funds. “If you don’t want to use asset allocation, if you are great stock picker, if you want to ride everything in healthcare and technology, then we’re not the firm for you,” he concludes.

Elizabeth D. Festa is a freelance business writer based in Washington, D.C. She can be reached by e-mail at [email protected].


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