The Great Wealth Transfer: How to Keep The Kids From Firing You

3 Steps to Building Stronger Client Family Relationships
Experience tells us that if a meaningful connection has not been made with your client’s kids, before inheritance comes into view, odds are they’ll find a new financial advisor. As a trusted advisor, your good work to prepare the assets for transfer is not enough to retain the heirs if you’ve not first established a relationship with them. Do you know your clients’ family members—children, spouses, grandchildren and even the pets?

This article introduces a practical tool, the Client Family Tree and how to use this tool to get to know more about your entire client families at a more personal level. (to download a copy of the Client Family Tree, click on Sign Up Now at the bottom of this page)

Many advisors ignore the next generation until it’s too late. In a 2011 Barron’s article, Sally Krawcheck, then President of Global Wealth and Investment Management for Bank of America, said, “If your first introduction to the kids is: ‘I’m sorry for your loss, my name is Phil,’ that doesn’t work.” Yet little progress has been made since. According to Cerulli Associates in 2018, only 13% of affluent investors remain with their parents’ advisor after inheriting.

As a trusted advisor to HNW clients, you also need to be concerned since generational wealth transfer is accelerating. Cerulli also reported that $68 trillion in assets will transfer to heirs and charities over the next 25 years. That is a lot of your client’s money in motion! How prepared are you to retain the assets of your HNW clients and attract new HNW families from advisors who have ignored the beneficiaries of their beset clients?

Step 1: Define Who Is The Client
Ask yourself: Is my client Mr. Smith, Mr. and Mrs. Smith or the entire Smith family? Today’s “families” may consist of partners, nieces, nephews and stepchildren in blended marriages. Families are complicated as the popular TV comedy “Modern Family” so aptly depicted.

Step 2: Download & Complete a Client Family Tree for Your Best Client Families Before Sharing With Your Clients (to download a copy of the Client Family Tree, click on Sign Up Now at the bottom of this page)

The Client Family Tree is best used when meeting with your clients after reviewing their investments and updating their financial plan (by Zoom, phone or in person). To best prepare, identify as much information about the family members as possible—names and birthdates—in advance. This information can be found on clients’ IRA beneficiary forms or trust documents.

Step 3: Ask Your Client to Help You Complete Their Tree
Be sure and schedule additional time after the review meeting to share the Client Family Tree. It’s the perfect conversation starter to learn more about their entire family and what’s important to them. Begin by asking: “Would you like to help me fill in your Family Tree.”

Advisors have told us that clients become more animated when talking about their children (and often their pets) than about discussing their investments. As you complete their family tree together, you will learn things you never knew before about their kids, grandkids and their family dynamics. It gives your clients an opportunity to talk about what is most important to them—their family and the future success of their children. And, it gives you the opportunity to learn more about the entire family on a more personal level, beyond the family assets.

This is also a good time to review their trust documents and to verify who they named their trustee and executor and why. This may lead into another meeting which includes the family members named in these roles.