Why Training is Key to Participating in the Great Wealth Transfer
We know that trillions of dollars in family wealth is currently being transferred to the inheriting generations. Keeping the inheriting generations while attracting new HNW families from competitors who have not prepared to retain them is imperative to the growth and longevity of the wealth advisor’s business—whether you are Registered Investment Advisor or a financial advisor with a broker/dealer or an independent investment advisory firm.
Ask yourself: Do you feel confident the children, and spouses/partners, of your HNW clients will be your clients when the wealth transfers? How prepared are you to participate in the historic level of family wealth transfer currently underway? Test your knowledge now by taking our 10Q Trusted Family Advisor Checklist.
TrustedFamilyAdvisorChecklist 1 6 2021
Evolution of Family Wealth Transfer & Outcomes
While the majority of family estate transfers are one-time events, an increasing amount wealth is being transitioned before the estate transfers—”giving while living.” This makes sense since people are living longer and fuller lives and parents and grandparents want to experience in their lifetimes, the joy of seeing their children benefit and learn from family wealth.
Families are looking for a trusted advisor to not only manage assets, but also help them prepare their children/heirs for a successful wealth transfer – when beneficiaries receive and manage wealth in a manner to foster their development and lifetime goals and passions.
For advisors, waiting to meet the kids after the estate transfers, puts at risk the ability to retain the inheriting generation, including spouses/partners. According to Cerulli Associates in 2018, only 13% of affluent investors remain with their parents’ advisor after inheriting. Creating a meaningful relationship with the entire client family should begin before inheritance comes into view.
What Wealth Advisors Can do Now to Keep the Beneficiaries
Experience shows generational wealth transfer training is one of the best investments wealth advisors can make, no matter how well established their current client relationships are.
The majority of wealth advisors are highly skilled at managing their clients’ money. What advisors often struggle with is having that same level of skill when engaging clients on soft side issues that directly impact the future success of their children. Creating awareness with clients of the risk of wealth transition on unprepared families and the opportunities they have to prepare.
We’ve all read about, or know first-hand, families who have lost control of their assets and family unity over unresolved issues between family members. Family break downs often are the result of a lack of trust and communication, heirs not being prepared and lack of defined shared family values.
And, for families who ask for further help, advisors should be able to refer resources skilled in addressing family dynamics issues that are preventing the family from moving forward as a cohesive unit. It is not the role of the advisor to “fix the kids.”
The Innovator in Intergenerational Wealth Transfer Training & Family Tools for Wealth Advisors
The Institute for Preparing Heirs (IPH) is the first training and development firm for advisors who want to learn how to become a Trusted Family Advisor® and prepare families for successful wealth transfer. Our experience and original approach to learning and idea sharing, combined with practical, sophisticated family tools, give advisors confidence to initiate conversations that bring families and advisors together before wealth transfers. The end result is the ability of advisors to prepare families to prosper and thrive for generations, attract new client families, and become a new resource to other professional advisors who work with HNW families. Key IPH training takeaways for advisors:
• Gain a fresh approach and new perspective for working the HNW clients and their children
• Build stronger client family relationships at a time when the face of wealth, and needs of successful clients, are changing
• Address the family’s need for the successful transfer of wealth in order to retain HNW clients families and their assets
• Build a distinct competitive advantage to attract new HNW families from competitors who are not prepared to keep them
• Differentiate and grow your HNW business with a new skillset and toolset as the Trusted Family Advisor
• Adapt to a new dynamic for how, and what, advice is delivered to HNW clients
Engage the parents in conversations about the future success of their children, and they will engage their children, who will then engage you as their trusted family advisor. If not, there’s a real risk of losing the inheriting generation.
Find out more about the Institute’s upcoming advisor training.
