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Getting Clients to Follow Your Advice: Fired by the Heirs

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As all advisors know, it’s one thing to provide clients with appropriate advice and another thing to actually get them to follow that advice.

In this series of reports, Investment Advisor columnist and psychotherapist Olivia Mellan and financial behavior specialist Kol Birke of Commonwealth Financial Network address some common scenarios that advisors face in getting their clients to follow through on their advice. This advice for advisors flowed out of a web seminar hosted by Investment Advisor and ThinkAdvisor editor Jamie Green late last year.

As baby boomers continue to age, a scenario that advisors will increasingly have to address is the transition of wealth to the younger generation. But what if you don’t have a relationship with the kids? 

Scenario 6: Your Client’s Heirs Fire You

Jamie Green: Suppose that one of your biggest clients, a widowed business owner, has died. His children are now selling the business to support their own lifestyles, which you have long considered profligate. And although you’ve always been proud of the service you provided to their father, they’ve fired you and hired another advisor. What should you have done? 

Kol Birke: We can look at this through two lenses: through what you can do with your current clients and what you can do with the children of those clients.

I’ll start with current clients, because you already have a relationship with them. That’s a great lever point, especially since the question is what you should have done earlier.

It’s no surprise that the best time to instill good financial habits is when kids are young. Even if it feels like you’re stepping over some boundaries, you might want to try challenging your clients to mentor the kids financially. The interesting thing is that there may be a tug-of-war about this going on in the client’s brain, too. One side is saying, “I don’t want to have these conversations with my kids,” and the other side is saying, “But maybe it’s a good idea to have these conversations.” If you push really hard about having those conversations, the client’s brain is going to pull harder on not wanting to have the conversations. you’re just going to lose.

Instead, what if you say something like “As a financial advisor, I obviously have to recommend preparing your kids by having these conversations with them. But I get it; it’s a lot easier not to. You’re so busy; your kids have their own interests. What would happen if you didn’t have these conversations?”

Your clients may tell you that they know they should have the conversations but they just don’t know how, or they can’t find the time, or they don’t think their kids would be interested or they don’t know how to engage their kids. Once they start telling you these things, it means that they’re pulling in the other direction and they want you to help them out. That’s when you can join them on the right side. 

Olivia Mellan: Meeting with the whole family regularly is the best way to get the younger generation involved. After doing intergenerational retreats with wealthy families, I have seen that it’s very important to open the lines of communication, to have the older generation talk about what the money meant to them and where it came from. That’s why I encourage people to write ethical wills to their loved ones, sharing their life lessons, their mistakes and their blessings.

A very good book by Perry Cochell and Rodney Zeeb, ”Beating the Midas Curse,” also suggests that the younger generation of a wealthy family be given control of an amount of money that they invest or give to charity together, so they learn to work as a team.

If you consider having separate meetings to tune into the needs and goals of the younger generation before the parents are gone, you might build a bridge so that they know that they can trust you.

Read the original Investment Advisor column and the entire series of scenarios.


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