How Financial Advisors Can Retain Clients Through Multiple Generations

February 28, 2021 by

Advisor Wealth Mastery Team

As a wealth manager, you know that an important part of your job goes beyond the actual managing of wealth. It is about managing the client. It’s also about retaining the client so they continue to use your services for many years. 

To retain clients over the long term, you need to make sure you are keeping them happy and performing beyond their expectations with their wealth. They came to you so you could protect and grow their wealth. 

So, what happens when they pass their wealth on to their heirs? How can you have acted proactively to make sure you remain the wealth manager for the assets that are now in the hands of the next generation?

Read on to learn why the retention of these clients is so significant for your business. Then learn some strategies you can use to retain them as clients going forward.

Challenges Facing Wealth Managers

As your client’s age, you need to consider how to manage their wealth based on their age and goals. You know it’s important for your business to continually work to gain more clients too.

One real challenge facing wealth managers is the amount of money that will be transferred to heirs from their parents. The risk of losing those clients is real if as wealth managers you aren’t acting now to retain them. 

Let’s take a closer look at the numbers:

  • By 2061, $60 trillion will be transferred from 90 million estates
  • $36 trillion will go to heirs 
  • $5.6 trillion is paid in federal taxes
  • $20.6 trillion will be given to charitable donations

When noting these numbers, here is where it becomes important for client retention and wealth management. 38% of spouses who inherit wealth remain with the same wealth managers. Only 29% of children who inherit choose to stay with the same wealth manager. 

A Differing Perspective

As wealth managers, it’s important to recognize the differences in this new generation of wealth holders. They are not at all like their parents in experience or in how they navigate managing their affairs. The more understanding you can garner for they are different, the easier it will be to retain them as continued clients from their parents. 

This is a generation that is fluent with technology and it impacts how they operate. It also influences the decisions they make. They are comfortable with online banking and looking at their accounts through online portals. 

Yet, uniquely they want to be very involved in the decision-making that goes into managing their wealth. This generation is accustomed to having information at the tip of their fingertips. 

While they may seek counsel from you as a wealth manager, they will also go looking for information through technology. As a wealth manager,  you will find many from this younger generation are not likely to be hands-off like some of their parents might have been with their wealth. 

They are not likely to hand over their money and be blindly trusting.  So what can you do as a wealth manager to ensure they will continue to use your services as they inherit from their elders? Let’s look a little more closely at some strategies to use. 

Bond With Your Clients First

You already know how important it is to have a strong relationship with your clients. This is really the first step in helping to ensure their heirs will want to retain your services. 

When you meet with your clients, no matter their age, ask about their family. Keep track of the information and start to build a database of information about what you know about potential heirs. Let your clients talk and really listen. The more you really know about them as people, the better you might be able to make a genuine connection with them in the future. 

It also will help when your clients have complete comfort with you and they share that about you with their children. 

Start a Conversation With the Whole Family

Many families take care of their wealth and the kids have very little information about it. Start a conversation with your clients about the impact of an inheritance on their kids. 

Most parents want to protect their wealth and their kids too. They don’t want to have their kids negatively impacted by a sudden amount of wealth. Start to have conversations with them about how they want their kids to receive an inheritance and how you can help them do it in a way that isn’t likely to be negative. 

Then ask your clients to hold a regular meeting where the whole family is present. Let the kids become accustomed to hearing you talk about wealth and you are managing it for their parents. Let the kids build trust in you early. 

Some parents may be resistant to this. Show them it’s smart for their kids to learn the importance of responsible planning with money.

Make the Family Your Client

Once you have had meetings with the whole family, then start to treat the whole family as your client. These are people who will inherit wealth. They are going to grow into adults and need someone to manage it. 

The sooner you start treating them like they are already your clients the better. Many wealth managers make the mistake of knowing very little about the families of their clients. Then when they need to hook them as a client, they are starting cold. 

Include the whole family in the informational sessions you offer. Start to offer other financial services that the whole family needs. Talk to the kids about philanthropy and savings too. These are cornerstones for later financial success. 

Address the Money

This is a hard one for many people. They don’t want their kids to know about their money. They don’t discuss it with them. Some worry that if kids know they will inherit money, they will get lazy or it will change the kids’ behavior in a negative way. 

This is where you can make a big impact on the parents and the future wealth holders, the children. The more knowledge and information they have the better. It’s time to teach the parents the value of knowledge for their kids. 

If they come into their wealth already educated and knowledgeable about what they are going to inherit, they are less likely to make foolish mistakes. This will be a focus shift for many parents. 

You become key to helping the parents understand the importance of this education. You also become the teacher, so to speak, for the future wealth holder. You establish yourself as the expert for both groups, therefore, increasing their trust in you.

This also becomes increasingly important as parents age. If an adult child starts to act as a power of attorney for their aging parents, they are already well prepared. They can also help you to monitor parents if their aging might be impacting their ability to make sound decisions.

Offer Services the Family Needs

Make sure you are offering a wide range of services for the family beyond wealth management. There are many areas of wealth management that include things that can impact a family long term. Make sure you are providing those services for the family. 

This might include things like:

  • Estate planning
  • Retirement planning
  • College saving
  • Philanthropy
  • Long term care for older parents

The more you become an integral part of a family’s plans for the future, the more likely all members are likely to see you as important for future plans.

Address How You Communicate

Let’s go back to the idea of these new potential clients being fluent with technology. You need to shift the way you communicate so you are meeting their needs. 

Interestingly so though, while many of a younger generation are fluent with technology, they like face-to-face meetings when talking about their wealth. 

Don’t be afraid to offer educational opportunities via a blog, for example. Learn to dispense information and learning tools via the social media platforms this generation frequents. This younger generation flocks to video content. Think about how you can deliver information to them in ways they connect with. 

Remember to also keep on top of your LinkedIn profile. Show them you are savvy in the tech world. They want to see your qualifications in these kinds of professional forums.

Use These Strategies to Retain Clients Through the Generations

As a wealth manager, it’s never too soon to start to retain clients by working with the families of your current clients. This is a generation about to inherit large amounts of wealth. They will need someone to help them manage it. Show them early, you are the person well-equipped for the job. 

If you are looking for ways to market your business, we can help. Learn important marketing tips and strategies to help you grow you client list. Contact us today to get more information on our learning opportunities.


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