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Financial Planning > UHNW Client Services > Family Office News

How — and why — you should engage in multigenerational planning

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You can have a fantastic relationship with a client. Retirement funds could be invested in the perfect product. Everything could be exactly on target to meet your client’s goals.

But without realizing it, you could be just one serious health issue or life changing event away from all of those assets disappearing. Why? Because you’re not involving the entire family.

Why it’s important to involve multiple generations

A lot of financial advisors have great relationships with their clients, but are afraid their book of business will age with those clients. New client acquisition can be costly and time consuming, but multi-generational planning is a way to get new clients by focusing on your current book of business. Including other members of the family, preferably from multiple generations can help with protecting those assets before a health crisis or major life change occurs and could even yield a new client if you build a meaningful relationship.  

Client assets can slip away because you don’t have a relationship with anyone other than your client, who is often the father or husband of the household. Seventy percent of widows leave their financial advisor within one year of their husband’s passing because they didn’t have a relationship with the advisor, and adult children often move their parents’ assets to their financial advisor because they don’t know you. But again, if you are involved with multiple generations of the family early on and are talking about money and money decisions, this is less likely to happen.  

The purpose of a family money meeting

Family meetings happen all the time. Families come together to talk about vacation plans, where the next child should go to college and to discuss more serious matters, especially those involving health care issues. But there is nothing more serious and personal than money and too many families go silent when it comes to this topic.

Family money meetings don’t need to be uncomfortable nor do they need to discuss everything about a family’s financial situation to be successful, but they do need open and honest dialogue on the issues the family is willing to discuss. These meetings are about making sure your client’s spouse and children are comfortable with what’s happening to the family’s money.

They want to know what their parent’s retirement funds are projected to cover and why certain money is invested in certain ways. Adult children, in particular, want to know if there’s money coming to them or if there’s an intention to help out with things like college for their children or down payments for a first home.

It can also be an ideal time to help the next generation not only understand what’s happening to their parent’s money, but to get adult children more focused on strategies they should be implementing with their own savings.

In the end, it’s about making sure families are confidently facing their money situation.

Three suggestions for arranging a family money meeting

The next step is to get a family money meeting. In most families, the mother is the gatekeeper, the organizer for bringing everyone together and is therefore the key to securing a family meeting. If she understands the need for this meeting, she’s the one who will be able to convince everyone to attend. These meetings can take place in your office, at the home of your client or via conference call.

Below are three suggestions for arranging a family money meeting:

1. Holidays. “The holidays are coming and I’d like to bring you, your spouse and your children into my office to run through a high-level overview of how you have set-up your financial plan.”

2. Big anniversary. “I saw that you and your spouse will be celebrating a big anniversary soon. Will the kids be in town? If they are, I’d love to get us all together for a quick talk on the family money picture.”

3. Kids live far away. “I know your kids are living out of state now. Could I work with you to set up a call with your spouse and the kids so we can bring everyone up to speed on your retirement plan?

Approach the meeting in three phases

It’s important to make the meeting as useful as possible so preparation is key. Once you have a meeting scheduled, it’s time to put a plan together so the meeting is a success across all generations of the family. The three phases are:

1. Preparation

This is an important meeting so taking time to lay a little groundwork before the big day will ensure success. Below is a quick list of questions to review before the meeting:    

  • Are both your client and their spouse on board with this meeting? Are there any concerns?

  • Who from the family will be attending?

  • What does the family want to communicate?

  • What are your and/or their goals and expectations for this meeting?

  • Is the meeting more informational, or is it intended to help the family make a decision regarding a money issue?   

2. Execution

As the advisor, your job during the meeting is to serve as the moderator. You can help start conversations by introducing topics, but then step back and let the family talk, the following tactics may be helpful:

  • Encourage an open dialogue: This is not a formal business meeting where you need to follow rules and procedures. 

  • Help everyone find a voice: Many families have extroverts and introverts. Encourage everyone to speak, so you are aware of everyone’s style, goals and concerns. 

  • Help the family focus on the current situation, the future and decisions or situations coming down the road: This meeting is not a forum to rehash past situations or previous mistakes a family member may have made.

3. Follow-up

The primary purpose for this meeting was to develop a relationship with other family members. A few days after the meeting, be sure to touch base with your client and the family matriarch. The checklist below may help to facilitate a productive follow-up:   

  • Ask them how they felt the meeting went?

  • Have they had any additional conversations with their children which may have been triggered by the meeting?

  • If appropriate, reach out to your clients’ children to get their feedback from the meeting. Many adult children find family money meetings to be an excellent way to help them establish their own successful financial habits and better prepare for their future. For example, they may have learned that their parents have started a college fund for their children, which may give them more flexibility to focus on financial goals like saving for retirement or investing in a new business. Potential new client?

  • Were there any “to do” items? If so, provide a status update.

Combating an aging book of business and the expense of client acquisition is on every advisor’s mind. Involving a client’s family can help to keep that client for a longer period of time and may even bring new clients from other generations within that same family.  


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