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July 14, 2015 at 01:27 PM
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.
