As an advisor, you constantly scout for new clients. But it is possible that you tend to overlook a captive chunk of low hanging prospects when you deal only with the main earning member of the family who is usually an elder patriarch and ignore his heirs.
A Vanguard and Spectrum Group survey of 1,500 mass affluent, 1,000 millionaire and 500 ultra-high net worth households reveals that 62% of UHNWIs are willing to introduce their family to their advisor. Although the research covered US residents, its findings could be relevant for India also.
The report highlights that if you have no relationship with clients’ next-generation heirs, they are almost certain to take their inherited assets elsewhere.
Thus, you should involve the children of your existing clients in reviews so that you are able to win their trust too. This will help you get a larger wallet share from each family member. Also, ultimately, the accumulated wealth would be transferred from existing clients to the offspring.
Action steps
“Initiate client conversations about estate planning and wealth transfer, possibly hosting group discussions with families. In addition to deepening client relationships in a lasting and personal way, you’ll help clients and their families have candid, sometimes difficult, conversations about finances, wealth, and their legacy. This lets you establish personal relationships with your clients’ heirs and positions you to retain assets after they move to the next generation,” suggests the report.
Further, the report suggests that you can develop a strategy for ongoing heir engagement. For instance, consider a policy of meeting clients’ children when they turn 18. (The survey shows that many affluent investors felt 18-25 was a good age range for their children or grandchildren to meet their advisor).
Make it understood well in advance that every child or grandchild will get a “finance one-on-one” with you. These kinds of meetings can be arranged around a milestone such as going to college, graduating, or buying a home, recommends the report.
To sum up, you can win the confidence and trust of the clients’ next-generation heirs if you start engaging with them.
