An advisor called our marketing department recently for a recommendation on a list vendor. The marketing consultant asked the advisor, a gentleman in his 70s, why he wanted to buy a list. “Because my clients are dying, and their kids are taking the assets they inherit to their own advisors,” he said.
Retaining assets after a generational transfer is a big gap for most financial planning practices. Eighty-six percent of heirs in global family offices said they intend to fire the advisor used by their parents once they inherited their wealth, according to research conducted in 2009 by Rothstein Kass, an accounting and professional services firm. Younger generations are often unconvinced that their parents’ advisors are up to the task of managing their money.
The time to address generational wealth retention for your practice is well before those assets change hands. Getting to know your clients’ children better lets you offer planning assistance targeted at their current stage of life and be there as a trusted resource during the asset transition event, hopefully retaining the assets in the process.
The first step is to make sure clients understand that you want to get to know and work with their children. How you do that depends on the age of the children. For clients with children under age 30, a financial education meeting may be appropriate. For older clients with adult children who are closer to inheriting assets, the meeting may be more about communicating the clients’ financial decisions to their children. For high-net-worth families, a family governance meeting can help the family sustain substantial wealth over multiple generations.
Whether you focus on one of these approaches or use all three as appropriate for your clients, facilitating a family meeting is a valuable service and should be showcased in your marketing materials, specifically your practice brochure and website.