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How Three Advisors Engage the Next Generation of Clients in Financial Planning

Celeste Revelli March 18, 2020

three advisors engage next generation
Updated on: November 16, 2021

Many advisors know we’re on the brink of a giant wealth transfer. Over the next 25 years, $60 trillion in assets are expected to pass on to future generations.1

But have you thought about how you will engage clients’ children?

If not, you’re not alone. When asked how often they meet with clients’ children, 54 percent of advisors said less than once a year, and 18 percent said they do not meet with them at all.2

Failing to establish a relationship with this group could negatively impact your firm’s bottom line. Research shows growth is already a concern for advisors: Sixty percent of them believe that attracting new clients and assets will be a key challenge going forward.By the time children inherit their parents’ wealth, they may engage with a competitor, or worse, may not engage with an advisor at all. Replacing lost assets requires even more time and effort from an advisor—not to mention the frustration of watching carefully managed finances walk out the door.

To give you some ideas, here’s multi-generational wealth planning advice from three advisors who are finding success today.

Lesley Brey, Founder, LJ Brey, Inc.

Lesley Brey, a financial advisor based in Hawaii, believes it’s never too early to start talking to children about money. That’s why she created a guide for clients on positive money behaviors they should teach their children. One of her lessons involves the parent creating a grocery list—and sticking to it, even if the parent realizes at the store that they forgot something—to demonstrate the importance of planning and budgeting.

As clients’ children reach the seventh grade, Brey begins to focus on the child’s behavior and encourages parents to open checking accounts for them with an annual allowance for all their spending, including their clothing, recreation, and gifts.

“Anything you can do to turn money into their money, and not their parents’ money, will garner interest from a child at any age,” says Brey.

Through this approach, Brey has established relationships with nearly all her clients’ children who are high school-aged and older.

Brey believes by developing smart money habits early on, children grow into responsible adults. By the time a wealth transfer occurs between parent and child, the child can make informed financial decisions—and will rely on the trusted relationship they have with an advisor who can provide guidance.

Abbey Henderson, Chief Executive Officer, Wealth Advisor, and Coach, Abaris Financial Group

Abbey Henderson knows the next generation of clients are looking for more than just investment tips. They expect advisors to provide more value, including money management, peace of mind, and fulfillment.

To add more to her tool kit, Henderson enrolled in life planning and life coaching programs and started offering these services to her clients’ children—at no cost. She’s helped Millennials navigate new careers, pay off student loan debt, communicate with partners about buying homes, and more.

She believes a coaching or life planning relationship lends itself well to financial planning. By making connections with clients’ children now, she hopes they will return to her as their planning needs grow.

“I think the more deeply you know and understand your client, their vision, and their values, the more you can actually tailor their financial plan. I think you’re just going to get a better financial plan from someone that has this mindset,” Henderson says.

Her efforts are paying off: Henderson is already seeing referrals to start wealth planning for her client’s children, and some of her younger prospects say they selected Abaris specifically for its life coaching services.

Mark Jackson, Founding Partner and Private Wealth Advisor, Brandywine Oak Private Wealth

At Brandywine Oak Private Wealth, an RIA firm where the majority of advisors are between 30 and 35 years old, a portion of every client meeting is dedicated to discussing the client’s family. This opens the door for advisors to conduct family meetings and start working with children, even if it’s only a review of 401(k) allocations.

Mark Jackson works exclusively with the children. A young advisor himself, Jackson thinks his age makes him more relatable. Often these client children are his peers, so talking about purchasing a home, saving for a retirement, or planning a young child’s education comes naturally to him.

“I have two kids for whom I’m saving for college in a 529. So when I sit down with clients’ children and tell them about my situation and what I’m doing, it validates that they should be doing this as well. It makes them feel comfortable to know they’re working with someone who can relate to what’s going on in their lives,” Jackson says.

Hiring young advisors can attract next-generation clients and contribute to a firm’s succession plan. Of the children with whom he’s connected, Jackson estimates he’s developed a working relationship with about 30 percent so far. But even if he’s not managing their money now, he sees a long-term value in being an available resource as they plan for retirement and ultimately inherit their parents’ assets.

How You Can Start Interacting with Clients’ Children Today

If you’re looking to establish a connection with your clients’ children, consider creating an outreach plan. This could include short term initiatives, such as setting time aside to discuss children during a client’s annual review, or long-term strategies, like pursuing additional training to offer more services to clients.

Financial planning technology can also support this process. Many solutions offer a client website, which makes it easy for advisors to communicate with their clients and provide them with 24/7 access to their plan.

Next-generation clients present an exciting opportunity for advisors. And by taking steps to establish these relationships today, your firm will be better positioned as the $60 trillion wealth transfer from Baby Boomers to Gen X/Y draws near.

For more ideas on multi-generational wealth planning, download our recent eBook, The Advisor’s Guide to Building Financial Planning Relationships Across Generations.

Sources:

1. Cerulli Associates. “Engagement: Not Your Father’s Advisor.” The Cerulli Edge U.S. Retail Investor Edition 2Q (15)2019.

2. InvestmentNews. “The Great Wealth Transfer Is Coming, Putting Advisers at Risk,” July 2015. www.investmentnews.com. Accessed August 2021.

3. Practical Perspectives. “The Changing Role of Financial Advisors” Q3 2018.

Image of Celeste Revelli
About the Author

Celeste Revelli is currently Director of Digital Planning at Fidelity Investments, where she works on digital financial planning experiences for Fidelity advisors and clients. Starting her career as a registered advisor for a few years, Celeste has been in the financial services industry since 2009. She worked at eMoney Advisor for almost 11 years, where she led advanced planning support escalation, product research support, and eMoney’s financial wellness and financial education strategy as Director of Financial Planning. Celeste received her bachelor’s degree in communications and marketing from Loyola University Maryland and her certificate in financial planning from Boston University. She is a CERTIFIED FINANCIAL PLANNER™ professional and is currently pursuing her MBA specializing in financial psychology and behavioral finance from Creighton University. Celeste dedicates time to serving her community in the areas of pro bono financial planning and financial literacy, and she also serves the industry through her support of next generation planners, diversity and inclusion efforts, and exam and technology committees for the CFP Board. She lives in Philadelphia with her husband and son.

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