You may be actively engaging with your existing clients but have you thought of what will happen to your business in the event of their death? Do you have a good relationship with the family members of your clients as well? A study found that whenever a client dies, many advisors find it difficult to retain the adult children or surviving spouse as clients.
In fact, a study conducted by Investment News shows that 66% of adult children fire their parent’s advisor after receiving inheritance. This is even worse with surviving spouses as more than 70% of widows fire their family advisor after the spouse’s death, cites an article published by Investopedia.
In most cases, advisors aren’t even building a relationship with client’s children. Only 20% of advisers are targeting younger family members of their clients, shows a survey by Corporate Insight, a research firm based in US.
For starters, advisors must understand that the engagement strategies that have worked well with the current wealth holders may not work with a surviving spouse and certainly won’t work with millennials. If you haven’t succeeded in creating a personal relationship with the spouse while the client was alive, you may come find it difficult to deal with them.
Clients’ grown children are even less likely to consider you a source of guidance unless you have reached out to them at important times or events in their lives.
So how can you retain the client’s spouse and children? Here are a few tips you can do today to strengthen ties with your clients’ extended family members, especially their children.
A whitepaper titled ‘Expanding Your Practice to the Next Generation’ by Advisor Group recommends advisors to conduct beneficiary briefings. “Periodically, it’s a good idea to allocate part of each client review session to a beneficiary briefing during which you will work together to review and perhaps revise clients’ beneficiary designations. These reviews generally begin with a confidential meeting with the client only. Depending on the client’s objectives and preferences, they then can lead to opportunities for briefing beneficiaries on where they stand and what they should do in the event of the owner’s death,” suggests the white paper.
It also suggests advisors to mark important dates and events in their calendar. “Client relationship management software, e-mail and social media are making it easier for financial advisers to keep a calendar of clients’ key dates and events such as birthdays and anniversaries. Relationship focused advisors have developed systems for sending clients cards and reminders by the calendar,” states the white paper.
Another advisory firm Oppenheimer Funds recommends advisors to devote meaningful time and attention to understanding what’s important for your client’s spouse. “Get to know them personally. Take their feedback on how they want to be engaged and how often they want to hear from you. Building a genuine relationship with spouses should be a top priority and if you do it right, it’ll dramatically improve your odds of retaining them when the time comes,” recommends Oppenheimer Funds.
Millennials
To connect with millennials, one way is to plan a family wealth and values meeting where these topics can be discussed collaboratively across generations.
Another approach is to hold a next-gen client event focused around financial issues that interest young clients the most. They value topics like wealth transfer, resolving family conflict and wealth preservation.
Today’s generation shows a keen interest in networking with people like themselves. You can host a networking event that allows their adult children to come together and discuss shared challenges and opportunities. This generation strives to network and an event like this would offer a real opportunity to give them the type of engagement they crave from an advisor.
These ideas may help you to establish your relationship with your clients for years. Whether or not the next-generation family members become your clients, these ideas can help make your existing clients aware of your interest in the extended family and they will be more appreciative of your commitment and long-term value.
