After decades of working together, advisors and their longtime clients form tight bonds. These relationships often extend to the next generation. This can be a vital part of building a successful financial advisory practice that lasts.
Some advisors adopt a proactive strategy to cultivate the rising generation. But if they push too hard, they can drive away the people they’re trying to attract.
What’s the best way to win over clients’ adult children? Start by creating a firm that appeals to all ages.
“We tell parents that we want to figure out a way to make it easy for your children to work with us in their style,” said Mike Searcy, a certified financial planner in Naples, Fla. “We know that parents are concerned that there’s continuity” for their kids in planning their financial future.
In 2010, Searcy launched a subsidiary company to focus on a younger clientele. It has a different name and brand identity geared to up-and-coming professionals.
“Unlike the parent company, our subsidiary has no minimum asset requirement,” Searcy said. “It’s a different tier of service with millennial partners — advisors in their 30s — who can relate to my clients’ adult children. My clients encourage their kids to meet with us.”
Knowing that younger clients are more tech-savvy, Searcy harnesses technology at the subsidiary firm. Clients must agree to receive communication via email and many opt for videoconferencing, online educational resources and electronic signatures to sign documents.
To work with multiple generations of a family, advisors create opportunities — both formal and informal — for clans to share financial goals and strategize about their future. By hosting such events, advisors help families come together over money issues.
“When we do an estate plan for the parents, we like to bring in their children so that it’s no longer cloaked in mystery,” Searcy said. “Even if the kids don’t see all the details about Mom and Dad’s assets or the value of their business, they get a sense of the master plan.”
In addition, his firm offers coaching for clients’ adult children or grandchildren who seek financial advice. He finds that giving them practical home- or car-buying tips can double as a trust-building exercise.
Such meetings lay the groundwork for a full client relationship as their assets grow. Searcy, 63, hands off the coaching duties to junior associates so that they can build rapport with their peers.
Matt Sivertsen, a certified financial planner in Moline, Ill., goes a step further. He offers to host what his firm calls “first step cash management” meetings with clients’ adult children. In these one-hour sessions, they learn budgeting tools to develop a long-term financial plan.
“We’ll ask the parents if they’d like to have our 27-year-old junior planner take their children or grandchildren through this cash-flow management process,” Sivertsen said. “In offering this education, we may find that in five years they remember what we did for them” and sign on as clients.
To encourage a client’s adult children to come aboard, Sivertsen’s firm offers them a 10% discount on its monthly or quarterly retainer. But what helps even more is exposing them to comprehensive financial planning in the first place.
“When Generation One holds a family meeting, Generation Two comes,” he said. “They come away seeing what we’ve done for their folks, how we focus on being stewards of the balance sheet and the breadth of our analysis, and they understand the full scope of what goes into a financial plan or a retirement plan.”
Initiating periodic contact with a client’s adult children — with the parents’ consent — serves as relationship-building outreach. Advisors involve the next generation by inviting questions and providing information they can use.
“We touch base with them one or two times a year with Mom and Dad’s permission,” said Brian Spinelli, a certified financial planner in Long Beach, Calif. “We not only ask if they have any questions, but we might also get ahead of certain health issues related to their parents such as early signs of dementia or other behavioral issues.”
Spinelli has learned that he doesn’t need to impress the next generation by discussing investment strategy in depth. Instead, he responds to their queries with jargon-free advice.
“We can get too technical with them and go into the weeds,” he said. “But we’ve found that they usually don’t need a lot of technical information. They just want to know we’re here and what our role is.”
For more information or questions, please contact Halbert Hargrove at firstname.lastname@example.org.