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Financial Planning > College Planning

Ethical Wills: A Good Way to Get Close to Clients

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I recently spoke with a client of mine, Norm P., about writing an ethical will. We talked about how his three kids had graduated from college without a sliver of debt, whereas he spent time in the Army and struggled financially as a young man. It was one of the first times anyone had asked him about the life events that had shaped his financial beliefs, and he was proud to share his story with me.

Our conversation inspired him to begin writing down his experiences, so that he could pass on the lessons he’d learned to his adult children and grandchildren.

What’s an Ethical Will? Why Should Clients Do One?

Dating back to early biblical times, ethical wills are intended to pass along family values from one generation to the next. They’re not legal documents; rather, they convey the stories and beliefs that have influenced clients’ financial lives, serving as family heirlooms and teaching tools long after the writer has passed away. 

As a complement to your estate planning process, ethical wills can help you build trust with clients and forge relationships with the next generation. But they’re not for every client—or every advisor. If you’re thinking about introducing ethical wills to your clients, it’s important to understand what the process entails and whether it makes sense for your business.  

Before moving ahead, ask yourself a few key questions. 

  1. Are you personally invested in the process?
    My friend Gary Williams of Williams Asset Management in Columbia, Maryland, certainly “walks the talk” when it comes to ethical wills. A successful wealth manager himself and author of The Art of Retirement, which includes a chapter on ethical wills, Gary has a powerful reason for discussing them with his clients. After losing both of his parents early in his life, he wishes they’d left behind such a document that he could share with his family.

    I’m fortunate to have an ethical will composed by my mother before she passed away several years ago; that handwritten letter is one of the reasons I decided to incorporate ethical wills into my practice.

  2. Have you written one yourself?
    If you’re going to encourage some of your top clients to record up to 10 pages of beliefs, you should understand what you’re asking of them. Once you start writing an ethical will, you’ll quickly realize what a serious undertaking it is. Keep in mind that clients may want to read your ethical will before agreeing to do one themselves, so be ready and willing to share. 

    I’ve written my own ethical will. One of my financial goals is to raise my three children to be as fiscally responsible as my wife and I are. My parents instilled a sense of financial awareness in me at an early age, and I want to pass along these same beliefs to my kids. By creating an ethical will, I hope to help them continue this tradition with their own children. 

  3. Does it fit your firm’s personality?
    Creating an ethical will is an emotional process. Are you comfortable discussing clients’ personal stories, and would they feel comfortable sharing their memories with you? Do you interact frequently with clients, both in person and via your website and social media? Is philanthropy a key focus for your practice? For advisors like Gary who emphasize charitable planning, offering ethical wills may be a natural fit. 
  4. Are your expectations realistic?
    Ethical wills aren’t for everyone, and it won’t make sense to discuss them with every client. Gary suggests using the 80/20 rule in reverse, introducing the concept of ethical wills to 80% of your clients and assuming that only 20% of them will complete one. Also keep in mind that creating a process for implementing ethical wills (and following up with clients) can be time consuming for you and your staff.

How Do You Draw Up an Ethical Will?

Once you’ve answered the questions above and determined that ethical wills are a good fit for your practice, you’ll need to establish a process for implementing them with clients. So take these steps: 

  1. Gauge clients’ interest.
    In my office, we discuss ethical wills with clients during our annual or semiannual in-person reviews. It usually takes several conversations for clients to embrace the concept, so be prepared to revisit the topic multiple times. Many clients will agree that it’s a great idea, but only a handful will be ready to move forward right away. 
  2. Make it easy for them to get started.
    We give clients general instructions for writing an ethical will, but we don’t specify a word count or place boundaries on what they can write about. We also include a list of question prompts to get them writing. (Have the instructions and questions available during your review session and ready to e-mail to the client.) 

    Broad questions like “What does money mean to you?” can be overwhelming, so I usually start by asking about the three most influential stories that shaped their beliefs about money. 
    For example, ask:

    Was your family financially fortunate when you were growing up?”

    Did you pay your own way through college?

    What was it like receiving your first paycheck?

    If you are divorced, how did you make do financially?

    Were you raised by a single parent?

    If so, how did this impact you?

  3. Offer support. Clients may face some writer’s block until they get the first few sentences down on paper. Remember, you’re asking them to distill a big part of their life into a handful of pages, so be prepared to be patient and provide ongoing encouragement.

    Writing an ethical will can also be highly emotional, conjuring up good and bad memories, and clients may shed a few tears along the way. If you’re working with a couple, they may find it helpful to start writing independently and combine their thoughts later in the process.

  4. Work out the details.
    Once the writing’s done, ask clients how they want you to handle their ethical wills. For instance: 
  • How often do they plan to revise it? Some clients may want to revisit the document every several years.
  • When do they plan to share it? Some clients will decide to read their ethical wills with their families; others will want to keep them private until they pass away.
  • Where will they keep it?
    We often house clients’ ethical wills in an e-vault and have them leave a signed, handwritten copy in their desk or safe. 

Just as writing an ethical will won’t interest every client, it’s not a service every advisor will want to offer. Those who do, however, will likely enjoy a closer, more positive relationship with their clients.

For more on ethical wills, see Gary Williams’ The Art of Retirement


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