“Financial planning”, “Financial Advisory”, “Goal-based investing”, “Plan your Finances.” Are there just too many me-too advisers setting shop in your neighbourhood? If you don't want to be just another brick in the financial planning wall and offer holistic financial planning, then succession planning is the right extension.
Wait! Are we talking about “wills”? Wouldn’t the client get hurt, when advisers lead the conversation to a negative path delving into mishaps and untoward accidents? Well, succession planning is not just an opportunity but a necessity. What’s the use of creating the savings pool, if the survivors have a tough time reaping the benefits!
Remember, the main role of a financial planner is to help investors save money. When a will is in place survivors and heirs save not just money, but time involved in transferring assets. Not only does estate planning help financial advisers cover the entire gamut of financial needs but also brings in monetary rewards.
If you are wondering how to ease the nerves of your clients while you talk about the grim reality of life, we have a couple of tips to help you bring up the conversation on wills in a subtle way.
Firstly, don’t use the word - wills. Instead, you can hit on the topic saying “succession planning” or “estate planning”, which are easier on the ears. For death you can use phrases such as ‘after you’.
Later in the conversation, bring out the benefits of estate planning. Tell them that putting a will in place helps them estimate the entire basket of assets held and collate information on the value of assets. When they start listing out their possessions, it not just gives them a sense of fulfilment, but also serves as a ready reckoner for them and the heirs in future.
Plus, the preparation for will creation doubles up as a validity check on nominations logged in the past. We have seen ample cases, where people realised they hadn’t changed the nomination under major financial assets and even house after key life events such as marriage, divorce or death of parents, during the exercise of collating a list of belongings. Timely change in nomination too rules out the possibility of an ordeal when claiming assets
You can go back to the drawing board and run a check on their listed goals. Child’s education, daughter’s marriage, retirement etc. Ask them to imagine a situation when the entire effort of saving over the years goes down the drain if these benefits aren’t passed on to the family when they aren’t around.
An instance to cite here is of an adviser who got to know of the hardships that a client's family was going through after his demise. A part of the portfolio was parked with this adviser. He went beyond his mandate to find out other assets and then help the family claim them. Until the adviser reached out to the family, they were wondering how to gather funds for their daughter's education, which the now dead father had planned well in advance for. A thought on selling the house had crossed the widowed wife’s mind too.
You can lead them through similar difficulties faced by people, especially those who died intestate.
If a young client tells you it is too early for him to write a will, tell him that no one expects the sun to set so soon, likewise it is never too early to write a will. This point is better driven through anecdotes and examples.
Like an adviser, who recently narrated an incident when his client approached him quite hassled. “He was adamant on preparing his will. When asked about what lead to the sudden thought of a will, he re-counted how an accident killed both his friend and spouse. In the absence of a will, grandparents found it difficult not only to come to terms with the loss, but also to gauge details of assets their son had accumulated. Dealing with authorities to transfer assets to their grandsons was another challenge.”
You can close the conversation by asking them their date of birth. Once they answer, pop up the next question, “What’s your date of death?” Once they realise the message, ask them to be prepared for the uncertain. As Benjamin Franklin rightly said “by failing to prepare, you are preparing to fail”.
The views expressed in this article are solely of the author and do not necessarily reflect the views of Cafemutual.