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“Then, explain the tremendous amount of complexity that comes with the role,” he says, and offer to educate her children at a family meeting. “Recommended guests at this meeting [are] execu- tors, named alternates or co-executors, and power of attorney agents.”
Also, tell the client that the meeting will pro- vide greater clarity and comfort about her legacy to the whole family.
“This is the advisor’s chance to make a lasting impression and create [an] enduring rapport with attendees,” says Shorten.
Start the meeting by asking all family members to identify what they’re comfortable and uncom- fortable with when it comes to estate planning. Then, walk them through how your client has structured her plan.
Be sure to pause and discuss confusing concepts so you can educate the family. For instance, you can define estate planning, and explain the duties of an executor and power of attorney.
In your closing comments, let the family
know you will follow up by phone or email on the
$1,000,000,000,000
topics discussed, and emphasize the value of their business. This will position you as an advisor who wants to work with the whole family, says Shorten.
He says this strategy has been successful in the past. “I worked with an advisor a couple years ago who had an elderly, ultra-high-net-worth client [who] was close to 90.” By holding similar family meetings, “he was able to turn the beneficiaries into clients and keep almost all the family’s $20 million in investable assets.”
In addition to offering more family meetings, Shorten suggests sending a series of educational emails, filming a few instructional webinars or recording podcasts to distribute to the family (either tailored to them, or generic ones you can use with multiple families). Topics could include asset allocation, the nature of risk and return, or the importance of early planning.
Another strategy to make the initial con- nection, says Sajjad Hussain, is suggesting the parent and child combine their assets to receive a discounted fee.
The assets would be separate, and private information wouldn’t be shared between family members, but the funds would be bundled. “A lot of the time, children want to be independent,” Hussain says. “But if there’s an incentive to pay a lot less based on what their parents have accumu- lated, there’s an incentive for that child to be using the same advisor.”
But, he warns, “It can’t just be about managing their assets. Let the parents know you’re more than happy to meet with the child to educate [him] about financial planning.”
And, tell them even small amounts are worth- while. “Many times, parents feel [if] the child has $10,000 saved, it’s too little for that advisor, and it’s not. The advisor [should] be happy to [invest that] $10,000 because it’s not about the money; it’s about the future relationship.”
If the parents agree, invite the child to a meet- ing. “You want to be able to ask proper [KYC] questions about their knowledge about invest- ments, what they have accumulated to this point, and what their investment goals are,” Hussain says. With the parents’ consent, you can then recommend bundling assets.
Next, suggest a follow-up session. “Keep [meetings] part of the routine; hopefully that will be enough to build a continuous relationship with that child.” 12
Close to $1 trillion will transfer from older to younger generations in the next decade
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