While financial advisors know the importance of working with the entire family in retaining and managing their wealth through the decades, they may need improvement in terms of how they actually interact with them. A research study conducted last fall by Everplans in partnership with Cerulli Associates pointed out some of the issues.

Fully 95% of the financial advisors surveyed said they had a relationship with their clients’ spouses, and they estimated a 75% chance that these spouses would retain their services when their primary clients passed away. But is this really the case, or were the financial advisors being overly optimistic? The gender bias still exists, and other studies say that the majority of widows will dump their husband’s financial advisor because they have never been engaged in the financial planning process, pointing out that when women stay with advisors, it’s usually because their advisors spent a lot of time with them upfront.

In a relationship-focused business, advisors need to make time to ensure that they’re building better relationships, rather than just focusing on building their practices.

And what about the next generation–the clients’ children? A very confident 90% of the financial advisors surveyed believed they would continue to manage at least a portion of the family’s assets once the wealth passed on to their clients’ children. However, only 7% of those clients’ children were actually established clients of those same advisors. When it came to grandchildren, 92% of financial advisors surveyed were barely acquainted with them. Yet, 50% of advisors said they believed the family’s assets would stay with their firm when the assets passed to these unknown grandchildren. This truly is a case of wishful thinking.

So what’s a stressed-out, busy financial advisor to do? Communication is critical. You are often the key person when it comes to important financial documents that spouses, children and grandchildren will ultimately need someday, so why not take action sooner rather than later?

Perhaps the most important thing you can do when it comes to forging and establishing relationships with succeeding generations is simply to ask your clients to invite their children and grandchildren to meet with you, something 30% of the surveyed financial advisors said they hadn’t done. You can also host informational sessions with younger generations about managing wealth so that they better understand the services you provide.

For further reading about this issue, we recommend “The Great Wealth Transfer is Coming, Putting Advisers at Risk,” from investmentnews.com.


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