Become the Family Wealth Advisor

Every client will leave a legacy. Help them define it.

Your clients hope the inheritance they leave becomes a reflection of the love they have for their families. They hope it helps leave their children better positioned to fulfill their dreams. The unfortunate reality is that without proper planning, an inheritance can destroy families.

It is your job to help make sure this doesn’t happen. You need to be asking your clients:

What impact do you want to have on your family after you are gone?
What plan have you put in place with your children to avoid the risks that occur during a transfer of wealth?

As their family wealth advisor, the only way to assure your clients that their goals can be realized is to start talking with them now about family wealth management.

Take control of the family wealth conversation. Click or scroll to start.

Create Trust through Communication

It's a sad fact – inheritances can tear families apart. Oftentimes, your client's best intentions and goals for their family end up causing irreparable harm, and their vision is never realized.

After the parents are gone, it is not uncommon for the children to fight over assets or to cash out, despite the wishes of their parents. This departure often occurs because the parents never got the family on the same page.

Honest communication within the family builds trust and sets the children on the right path together.

As the advisor, you must take on the role of facilitator. Help your clients communicate their wishes to the rest of the family, and through education prepare the heirs for the wealth transfer.

Sometimes families are not ready for the responsibility of new wealth, and their lack of preparedness ultimately undermines the intentions of your client and the smooth transition of wealth.

Brokering trust within the family will ultimately lead to strengthening your relationship with the entire family, so they are comfortable consulting with you after the transition.

Best Practices for Crafting Meaningful Relationships

Initiate the Family Wealth Conversation

Your clients undoubtedly want to use their wealth to leave a personal legacy that supports family traditions and values. Family wealth management is essential to making sure your client’s wishes are met and their legacy is realized after they pass away. However, most investors have not had the conversation with their advisors.

An open and honest discussion with your clients and their children is an essential part of ensuring their goals and wishes are met, and it helps solidify your position as the family advisor. But research has shown that investors will not initiate the conversation on their own, so you must be comfortable broaching the subject. Be confident, knowing that they will be glad you did.

Identify the Right Clients

Review your current practice, and identify clients and their families that would benefit from having the family financial wealth conversation. It will help your clients and build a bridge to the next generation. Start with clients who have adult children that you would like to have as clients. An example of that might be, key clients whose adult children are already savers and investors, and who have family education or retirement goals and plans.

Clear the Air

Money is sometimes a taboo subject, especially among parents and children. Because of awkwardness, neither side is likely to bring it up. So as their advisor, be willing to bridge the gap by starting the conversation with both parties. Explain that an honest and deliberate conversation now can lead to a seamless transition later.

Get Started

  • Encourage your clients to think about the long-term goal they have for their family. Make the conversation less about simple wealth transfer and more about family wealth planning as a whole.
  • Find out what legacy your clients want to leave after they are gone. Use the notion of family wealth planning to help them get there.

What the Conversation Really Is and Isn't About

Gain Multigenerational Client Relationships

Obviously, a referral is easier to close then a cold lead.

So when we asked advisors who are successful at attracting Gen Y investors about their best prospecting technique, it was no surprise that most said they develop relationships with the children of their clients.

Since an advisor's business lives and dies by the ability to bring in new investors, it makes sense to convert the children of your established clients into individual clients.

But only one in seven investors share the same advisor as their children. In fact, most children have never even met the advisor. You must reverse that trend.

Most of the time, the children already have an advisor, and if you don't use the family wealth planning conversation as your opportunity to win their business, you'll lose control of the family assets entirely.

You must make an effort to establish a relationship with the adult children while you can and commit to nurturing it over time.

Get Started

  • Encourage family referrals by pointing out to clients why it is advantageous to introduce you to their children. A shared advisor makes it easier for your client's wishes to be upheld after they are gone.
  • Facilitate open conversations with your clients and their adult children to make sure their family wealth planning goals are communicated clearly.
  • Stress the importance of ongoing dialogue in meeting your client’s goals.

Why Gen X and Gen Y Matter

Identify the Alpha Child

As they age, parents end up relying on one child in particular; this is the alpha child. Ask your client who they have assigned as their health care proxy or as the trustee on their trust or holder of their power of attorney. Often, the parent is quick to answer those questions with the name of one child. That child is going to be the most involved in the family wealth conversation at home, so focus your efforts there.

We believe that the critical pieces of the family wealth conversation are not only helping the client articulate their wishes, but also identifying the alpha child in the family so you may begin conversations with them.

Ask your clients for an introduction to that family member. Our research suggests that investors are more comfortable making the introduction than advisors might think.

Even if they already have an advisor, these children are often willing to meet you so they can better understand the wishes of their parents. It is critical you develop a good relationship with the alpha child while the parents are alive, not only so you can help ensure your client's best interests are upheld, but also to give you a better chance of retaining the family assets.

Get Started

  • Have an open conversation with your client to find out which of their children should be involved in the family wealth conversation.
  • Change your mindset and think of your client’s children as your best prospects.
  • With your client's permission, engage with the children of your clients, and capitalize on every opportunity to convert them into clients. Send them relevant emails, conduct family meetings to prepare them for the wealth transfer, and call them whenever there is a shift in the family wealth plan.

Building Relationships with Targeted Family Members

Converse and Convert

The most successful advisors will be the ones who are able to facilitate the transfer of wealth to their clients' heirs without losing control of the family assets. Converse with the children of your clients as you would any prospect, with the goal of converting them into individual clients. To do this you need to involve everyone in the family wealth conversation.

Make sure you:

  • Build trust with your clients and their children through open communication
  • Introduce the idea of family wealth planning early
  • Create a relationship with the entire family
  • Concentrate your efforts on the alpha child

What We've Learned

Investors want their advisor's help to address difficult issues like the family wealth conversation. So call your clients and initiate the conversation.