Broker Check

Don’t Let Your Book Die With Your Clients

September 13, 2017

Don’t Let Your Book Die With Your Clients

The United States is on the verge of the largest wealth transfer in the country's history. Studies indicate approximately $40 trillion will be passed down to the next generation by 2050.

Unfortunately, most advisors mistakenly assume their clients’ children will stay with them after their parents pass away. However, the numbers tell a much different story.

In recent surveys, roughly 90 percent of children leave their parents’ advisors after receiving their inheritance. Clearly, advisors who don't form bonds today with these beneficiaries-to-be are ignoring a tremendous opportunity for tomorrow.

To help avoid having your book die along with your clients, work these simple steps into your business model.

Conduct Multi-Generational Planning

To have their businesses continue to thrive and grow, you will need to engage the next generation. So, what's the secret to keeping the next generation from leaving? Well, it’s nothing magical. It just takes time and effort to earn the children's trust.

By positioning yourself as the trusted advisor to the whole family, you’ll build relationships with the heirs long before the parent passes away.

Unfortunately, few advisors take the time to build relationships with their clients’ children. Simply put, if you don’t adapt a strategy for retaining heirs as clients well before the wealth transfer occurs, you’re at serious risk for losing the assets.

Sit in on Family Meetings

No matter what your client’s age, if they have children, they will want to ensure their children are taken care after they pass away. Clearly, this can lead to some difficult conversations. But if you don’t have them, someone else will.

Smart advisors are encouraging clients to hold family meetings for this specific purpose. Often the advisor will sit in on the meeting as a guide. In this relaxed setting, your client’s children get a chance to see you and get to get to know you.

At this meeting, you might consider asking, “If something happens to you, what's the plan?” That will usually lead to “What's the plan for your kids?” By posing these questions, you position yourself as a problem solver.

The goal is to take clients on a systematic journey that calms their fears and simplifies the planning process. You can give them a stronger decision-making framework and help them understand their short-term and long-term choices.

Form a Strong Bond With Your Clients

The key to retaining heirs’ assets is to bond with clients. Although it can be a little awkward at first, encouraging them to open up about their life and family is the initial step.

If the client has children, you might ask “Tell me about your kids.” The idea is to positively influence the next generation, so they can see firsthand you’re passionate about doing a great job for them and their family.

To create multigenerational practices, make sure clients’ children get to know you long before they receive their inheritances. Developing deep, rich relationships with clients goes far to gaining the trust and loyalty of succeeding generations. If done right, you could earn business from that 10 percent of children who keep their parents’ advisors upon receiving their inheritance.

Contact Iron Point for a no-obligation coaching call to learn more ways to avoid letting your book die with your clients.