When children inherit wealth from their parents, they are likely to need quite a bit of financial guidance. And if they have not established a relationship with their parents’ financial advisor, they may seek guidance elsewhere.
With more than $30 trillion expected to transfer from baby boomers to the next generation over the next three decades, it may be critical for advisors to establish a family-focused practice. Surprisingly, many advisors do not typically meet with the children — and potential heirs — of their clients. An InvestmentNews study found that the majority of advisors — 70% — do not meet with an investor’s children in a given year.
It may be challenging to connect with the next generation of clients, particularly with time or geographic constraints, but recognizing special events or milestones may help start the process of building a relationship.
Here are some events and ideas for connecting with the next generation:
High school graduation
- Share helpful tips on the topic of preparing for college
- Talk to parents about completing a health-care proxy with children who are heading off to college
- Send a note of congratulations or a gift recognizing college acceptance
- Discuss the idea of establishing a Roth IRA with summer earnings
- Offer tips or services for students on banking, establishing a checking account, or acquiring a credit card to build a credit history
- Provide information on budgeting, including a focus on helpful apps (e.g., Mint.com)
- Share tips on establishing a professional profile on LinkedIn
- Share tips on using LinkedIn for networking purposes
- Offer a “mock interview” to help recent grads entering the workforce
- Assist with retirement accounts and savings vehicles
- Offer insight around debt management, including debt consolidation services
- Share educational content on financial literacy
- Provide or refer mortgage services
- Help establish a savings account for a down payment as well as an emergency account
- Provide information on creditor protection considerations, such as umbrella liability insurance or homestead protection.
- Offer a retirement checkup to make sure long-term goals are identified and progress is on track
- Establish a 529 savings plan for both the parents and the grandparents
- Send a note of congratulations and/or newborn gift to clients
- Advise parents on initial estate planning, including documents such as a will or trust
- Present insurance solutions, including life and disability
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.