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.