Make the Family the Client

As a wealth manager, your role extends far beyond just managing assets. It is about managing the client relationship and maintaining their trust to ensure long-term business success. With the looming transfer of wealth from aging clients to their heirs, it is crucial for wealth managers to take proactive steps to secure their place as the chosen advisor for the next generation.

The Challenges
With time, clients grow older and their wealth management needs change. As a wealth manager, it is important to adapt to these changes and continue to acquire new clients. One of the biggest challenges facing the industry is the risk of losing clients as they pass on their wealth to their heirs.

According to projections, by 2061, 90 million estates will transfer $60 trillion, with $36 trillion going to heirs, $5.6 trillion paid in taxes, and $20.6 trillion given to charity. The statistics show that only 38% of spouses who inherit wealth choose to remain with their original wealth manager, with only 29% of children doing the same.

A New Generation
Today’s inheritors are a new breed, unlike their parents in both experience and approach to managing wealth. They are tech-savvy, comfortable with online banking and financial portals, and want to be hands-on with their wealth management decisions. They seek counsel but also do their own research and are not likely to blindly trust their wealth managers.

Retaining this younger generation of clients requires a different approach. Here are some strategies to consider:

1. Build Strong Relationships
   Developing a strong relationship with clients is the foundation of retaining their business and that of their heirs. Ask about their family, listen to their stories, and build a database of information on potential inheritors. This will help you connect with them on a personal level and increase the chances of them choosing you as their wealth manager in the future.
2. Engage the Whole Family
   Many families are not well-informed about their wealth and the implications of inheritance on their children. Encourage your clients to have open conversations about their wealth and its impact on their kids. Offer to hold a family meeting where you can talk about wealth management and help the next generation understand the importance of responsible planning with money.
3. Make the Family Your Client
   Once you have established a relationship with the whole family, treat them as if they are already your clients. Offer financial services that the family may need and educate the next generation on philanthropy, savings, and other financial fundamentals. The earlier you start building a relationship with the family, the more likely they are to choose you as their advisor when they inherit wealth.
4. Address the Money
   It is not easy for many clients to discuss money with their children. However, as a wealth manager, you can help bridge this gap by discussing financial topics in a non-threatening and educational way. Encourage your clients to be open and transparent about their wealth with their children, and help them understand the benefits of responsible planning and management.

Retaining clients and their wealth over generations is essential for the long-term success of a wealth management business.