It was a Thursday night in July, when I got the call. I was only 21 years old at the time and had been up in Grand Rapids, Mich., all week studying to take my Series 7 securities exam to start my career in financial services.
It was one of my dad’s friends calling to tell me that my father had just passed away of a sudden heart attack. That four hour drive home was the hardest drive I had ever made. At one point, I pulled over on the highway to get sick, as I grieved and tried to take in the moment and shock of my loss.
Weeks later, after laying my father to rest, we met with his current financial advisor. A decision among the group was made after that first meeting that we would each go our separate ways and leave the current advisor.
A few years earlier, while I was in my teens, my parents had gotten a divorce and, later, both remarried. Both families had children from previous marriages, so we became a blended family, like many American families today.
My father, mother, and my first mentor, Mike Johnson, had taught me a lot about saving and investing up to that point. Dad lived by those principals and had worked hard to be financially responsible and plan ahead.
Being from a blended family, I learned a lot about the unique dynamics of dealing with a loss of a loved one and have learned first-hand the financial affairs and challenges that can happen along the way.
Now, as a financial professional for over 20 years who deals with similar situations with clients, several specific steps can be taken so other advisors don’t have to suddenly lose all the assets and can instead gain new relationships with their clients’ blended families.
Looking back on my own situation, as a beneficiary, what went wrong? It was the 90s so it is safe to say my dad’s investment account performance was great. The problem was that the whole process of meeting with his financial advisor was awkward for us. I don’t think the advisor really knew how to keep and grow the client relationship after his clients passed away. So, the advisor simply lost all the assets.
As a financial professional, I think I learned a lot from my personal experience with my family and with helping many families in similar situations. In most cases, I would say that not only have I been able to continue to be their advisor most of the time, but many of the other family members have also become clients of our firm. We have been able to achieve this by building a relationship right away with family members and being a resource in the time of need.
Here is how it can be done:
1. An advisor should be proactive on building a relationship with as many family members of a client as soon as possible.
That does not mean the advisor needs to manage the finances of all the family members, although that can be a big advantage. There is a big difference in the planning that a 65-year-old needs versus their 20-year-old grandchild. Know what you are good at and don’t worry about being the master of every generation.
2. Connect with clients and their families on a social basis.
Our office has several events throughout the year where we invite all family members to join us. For example, you can hold an annual client BBQ at a park or ask Santa Claus to come to your holiday event and have your clients bring their family for photos.