How to maintain clients that span the generations - Global Financial Distibutors


After years spent working hard for their money, Americans understandably want their money to work for them when retirement rolls around. Financial advisors help to make this possible.

According to a recent poll conducted by the Insured Retirement Institute, 86 percent of baby boomers with a financial advisor had $100,000 or more saved for their post-career years. This stands in contrast to just 65 percent among those who saved up on their own.

Leveraged Planning Solutions serves as a reliable strategy advisors recommend to clients to help them maintain and strengthen their retirement well-being and wealth management overall. But high-net-worth clients don’t want their wealth to last for the rest of their lives – they want it to span the generations, so their kids, grandkids and great grandchildren have financial stability as well.

“Only 29% of children who inherit assets opt to retain their parents’ financial advisor.”

Here’s the problem: The inheritors of wealth frequently don’t acknowledge or realize the key role advisors often play in helping their parents grow their savings. In fact, according to a 2015 Toluna Omnibus survey, just 29 percent of children who inherit assets opt to retain their parents’ financial advisor.

Forbes contributor Abby Schneiderman cited a similarly alarming statistic: Ninety-five percent of children sever ties with their folks’ advisors upon receiving their inheritance.

What explains the parting of ways? It may have something to do with advisors failing to make the proper emotional connections with the very people who are due to receive wealth. Based on a survey conducted by consulting firm Cerulli Associates, fewer than 10 percent of advisors said they had a relationship with their advisees’ kids.

“In a relationship-focused business, advisors must make time for building better relationships,” Schneiderman explained. “Advisors inherently understand that they should be focusing on the next generation, but turning those good intentions into action is sometimes easier said than done.”

Trillions of dollars in assets in motion
With an increasing number of baby boomers already in retirement or on the cusp of entering their golden years, the asset handover is in full swing. Tracing back to 2011, boomers are expected to transfer between $30 trillion and $41 trillion to Generation X and millennials through 2048, according to a report from Accenture and the Planned Giving Design Center. That’s a tremendous amount of potential business that advisors can tap into, accessible via strengthening the bonds and planting the seeds needed to establish relationships with clients’ heirs.

Where do you begin? Wealth contributor Kellan Goldberg wrote that a good launching point derives from performing a life insurance review.

“In most scenarios, the children and spouse will be the beneficiaries of life insurance policies, either outright or through a trust,” Goldberg explained. “Meeting to explain how the assets will distribute in different scenarios has real meaning to those beneficiaries, and positions the advisor as a trusted, knowledgeable resource.”

Goldberg added that talking about insurance serves as an appetizer, of sorts, where wealth is discussed but not to the point where it gets too personal, which may be uncomfortable for all parties involved.

Speak inheritors’ ‘language’
In this the digital age, younger clients are used to a different type of service than what their parents are accustomed to, noted Schneiderman. For instance, instead of coming into the office for a one-on-one meeting, they may be more accustomed to communicating via email, text message, social media or video conferencing.

Advisors should speak their would-be clients language to provide valuable education in a style or medium that they’re most comfortable.

Most clients love to talk about what’s affecting them and the people they love. Whether children are still in high school, college or have families of their own, taking a genuine interest in their lives lays the foundation for building long-lasting working relationships.

Estate planning isn’t a one-off deal. It requires ongoing communication and maintenance for wealth to be truly generational. For more guidance on the ways in which your clients can build upon what they’ve worked for so it lasts, talk to a Global Financial Distributors advisor.