Despite projections of a significant transfer of wealth from baby boomers to heirs in the coming decades, many investors may not be talking about estate planning with their financial advisors. In fact, a 2014 study found that only 35% of investors said their advisors provide family wealth management defined as a specific service.*
Financial professionals could make connections with the next generation by positioning their business as a provider of these services and expanding discussions to include the extended family.
Here are five ways to improve connections with the next generation:
- Promote intergenerational wealth transfer as part of the business value proposition.
- Build a broad network of experts. It's critical for all advisors to have a robust network of tax and legal experts to provide services and solutions to clients. Consider expanding that network to include other trusted experts in areas such as eldercare support, financing, long-term care, insurance, real estate, and Social Security decision-making.
- Develop relationships beyond the primary client. Engage the client’s spouse in planning meetings, and look for opportunities to meet heirs as well as other interested individuals such as attorneys, business partners, and trusted family friends. Prioritize contact and communication with the most influential heir, if one exists. In essence, the advisor is defining the relationship to be with the family rather than with the individual client or household.
- Enhance organizational capabilities. Develop processes and procedures that position the advisor as one of the “first contacts” when something happens within the family. In addition, consider adding junior members to the advisory team to work with a client’s adult children. Advisors can also take the lead in creating a process or action plan for families to document goals and objectives, as well as parameters for wealth transfer.
- Focus on technology. The next generation likely uses technology more than their parents. Using social media can help advisors build connections with other generations. For example, consider connecting with other family members on LinkedIn. Also, ensure that the surviving spouse can manage affairs online.
Making some of these improvements can enhance an advisor’s value and the likelihood of connecting with the family.
* Sources: “Engaging and Retaining Families,” Investment Management Consultants Association, 2011; Pershing, 2014.
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For informational purposes only. Not an investment recommendation.
This information is not meant as tax or legal advice. Please consult with the appropriate tax or legal professional regarding your particular circumstances before making any investment decisions. Putnam does not provide tax or legal advice.
