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I Hereby Bequeath

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When times are tough and uncertain, investors cling to their current advisor. Better the devil you know than the devil you don’t may be their thinking. They are slow to make decisions. Fear outweighs perception of opportunity.

But when money goes into motion, some decisions have to be made. This is certainly true of death, one of life’s two major money-in-motion events. The other major event is of course retirement, but even here, people can procrastinate by leaving their 401(k) with the last employer.  When death happens, money must go into motion. The market can be up. It can be down or sideways. It doesn’t matter. Until people figure out how to take it with them, the creditors get paid and heirs take the money.

You too must go into motion. As we’ll see, credible studies suggest it is a waste of time to try to develop a relationship with the heirs; therefore you should focus on replacing the assets you are destined to lose. I need your help to see if this is true, which is why I have created an “Inheritors Census” at We both want to know how death will affect your business. How likely are you to keep the wealth your clients leave? When one of your clients inherits, do they abandon you, their primary advisor, in search of another? If you take my survey, I will send you the complete report.

“Heirs Take Money and Run — from Financial Advisor.” That’s the headline of an article in the Nov. 6, 2011, issue of Investment News.  The stats are grim if you are losing the assets, exciting if they are heading your way.  Some 86% of heirs in global family offices intend to fire their parents’ advisor. Now you probably don’t preside over a family office, but there is corroborating data on smaller fortunes starting as low at $1 million.

Back in May 2003, Hannah Grove Shaw and Russ Alan Prince reported results of a survey done in conjunction with Merrill Lynch. It showed that 79.6% of inheritors switched primary advisors after inheriting, and that a strong influence on that decision was that they didn’t think their old advisor was up to the task of managing their new wealth.

The implications of these two studies, nearly a decade apart, are consistent — and scary. Even if you have a client who will inherit, it will likely go to a new advisor. In the next decade or so, baby boomers will inherit trillions from their parents. That money will exit the investment accounts of some advisors and move to other advisors. Will you be giving or receiving?

Final Transitions

I do not write of potential darkness without offering a light at the end of the fabled tunnel. For the better part of the year now, I have been heavily involved in creating possibly the best prospecting system I’ve ever developed — no small claim given my track record in areas ranging from cold calling to direct mail to referral prospecting. This new system will help make certain you are on the receiving end when estates go into motion.

Grove and Prince noted the importance of forming strong working relationships with the lawyers and accountants who manage estates, since inheritors often turn to such professionals for guidance in selecting advisors. They advocated building an “extensive advisory network.”

But how many times have you tried to build “an extensive advisory network”? How many times have you sent referrals to attorneys and accountants and had them send you little or nothing?

Here’s the solution: a networking group of professional advisors with expertise in end-of-life issues. My partners and I are creating such a network nationwide. It’s called Final Transitions Planning.

It’s organized by local chapter. This is a real, flesh-and-blood group, not “friends,” “likes” and “links.” It’s eight to 12 or even 16 professionals who meet monthly, are united by a fabulous website and “networking toolkit” and can be removed from the group for failure to perform. Those who receive referrals shall also provide.

To see a chapter website, go to (There’s no www.) Punch in the zip code 84094. Click on a category such as Attorneys or Financial Advisors. You’ll get the idea.

The chapter bylaws solve the “referral imbalance” problem because they address the real reason for the imbalance: trust. While trust has to be earned, we have speeded up the process by requiring that every member of each local chapter pass a 15-point background check. While not being bad does not prove trustworthiness, it’s a good start.

In developing this networking group, I selected a local advisor, Thom K. Hall, to build our first chapter. He and I made the initial appointments together. I was shocked at how easy it is to set appointments with very influential professionals.

On those first appointments, we learned that you can grow the networking group from referrals from your first two or three members. The key to that is now embedded in the bylaws.

We learned it on one of our first appointments, this one with an estate attorney. During the presentation, he commented that he didn’t mind if other attorneys joined the group so long as he felt comfortable with the quality of their legal work. Bingo. I asked him, “What if when you become a member you earn veto rights?” Ten minutes later he gave us a referral to a CPA and a guardian.

What’s so amazing is that it’s really easy to build a network of professionals — if it’s focused, if it provides a way to demonstrate trust, and if there are bylaws that govern the group.

Final Transitions Planning started when Daniel P. Murphy, managing director, investments, at Wells Fargo Advisors (and now a Bill Good Marketing client) had several clients lose a loved one in other cities. The relatives had no connections in these cities and did not know whom to call for the professional services they needed.

His very bright idea was, “We need a nationwide network of trusted advisors.” Dan had many conversations with childhood friend (and fellow Eagle Scout) Hank Carabelli, who had taken an early retirement from the telecom industry and was perched on a mountaintop outside of Denver. I signed on last year to develop the licensing, compliance, marketing and membership procedures.

The tools we have created with Final Transitions Planning certainly contain what you need to establish a large network of professional advisors. But they may also contain the tools you need to keep the assets you have.

In an email to me, Dan Murphy wrote: “Using the resource we have built, you have an opportunity to help a client through one of life’s most difficult times. You bring a steady hand, and you bring real help by directing them to a process that the average person never learns because they go through this only a couple of times, have no experience, and are emotional wrecks. When you can help a client during the loss of a loved one, you have a client for life.”

I think we’ve nailed this. If you agree that referrals from allied professionals are important and see how vital it is to have a new business channel not dependent on current market conditions, then please call my colleague Jill Olsen at (435) 849-4640.


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