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Generations: How I Became A Believer in Family Planning

No, not that kind of planning! A move to family financial planning has me working less and making more.

About five years ago, I made a decision that changed the direction of my practice: I started paying less attention to IPOs, the Fed and the quarterly earnings announcements that were so important to my dozen or so day-trading clients — the ones who were adding an extra day to my already harried work week. It was the first step in recasting myself as a family financial planner. My new title was warmly received by my clients, with the possible exception of the couple who misapprehended it and thought I had aligned myself with Planned Parenthood.

My approach was simple, if not easy. First, I began emphasizing long-term financial planning (as opposed to short-term investment management) with every client and prospect. Second, I worked to find out everything I could about my clients' lives and about their families.

How has it worked out for me? Despite working fewer hours than ever and despite horrendous market conditions, last year was one of the best of my 14-year career. Through the first six months of this year, my production is up about 30 percent over last year. And the fee-based portion of my practice has jumped from less than a third to almost half. Best of all, I do not have to reintroduce myself to my wife and children at the end of the work week.

Here's a rundown of the benefits of a family practice — for both advisors and clients.

Benefits for Advisors

So long, “dial and smile.” Even without the new legal hurdles being added for cold callers (see related story, p. 30), prospecting among unknown potential clients is a time-consuming and often not very productive process. A family-oriented practice, however, gives you great networking possibilities. The strength of family bonds can generate referrals that will override geographic distances and enable an advisor to build a practice that is not limited to his local area.

Client priority No. 1: the kids. My decision to focus on the family was motivated in part by an interesting bit of data I gleaned from an annual survey of the wealthiest 1 percent of Americans taken by U.S. Trust. The company asked what their biggest financial concern was. For several years now, the No. 1 answer has not been taxes, inflation, fees or the economy, it has been the financial future of the next generation. That fact made the family focus very intriguing.

Penetration. Focus on one area of investing, and you have to keep finding people who need your narrow set of skills. Earn the faith of a family and the sales cycle shortens greatly, because you are a known quantity. Opening an account with, say, a small 529 deposit can lead to six-figure retirement plans and seven-figure life insurance policies — if you make your presentation in the proper context.

Fees, please. When a family chooses you to handle its entire financial situation, its members hope (almost as much as you do) that the relationship continues for decades. A fee-based compensation structure serves the interests of all parties — clients are not blindly committing commission dollars up front, and you are ensuring that you will be getting paid for your work for years to come. A long career earning 1 percent of an expanding asset base is far more rewarding than even the highest of “A” share sales loads.

Clients for life — and beyond. The emotional loss we feel when a beloved elderly client dies becomes economic when an heir requests that the deceased's estate be liquidated and transferred to the control of a new advisor. Introducing yourself to your clients' descendants today can ensure their assets stay with you even after the clients are gone.

Benefits for Clients


Consolidating a client's assets with you will lighten the load of account statements flowing into his mailbox, save him legwork come tax time and ensure that the right hand knows that the left hand has just taken a position in, for example, emerging markets debt.


Once all of a family's accounts are brought under your roof, the client only has to keep one adviser in the loop. He doesn't have to start every considered financial move with the epic story of his family's history (although if he does, don't interrupt him with a “Yeah, you told me that already”).

Tax relief

The high-net-worth clients many of us lust after bear much of the personal tax burden in this country. When an entire family shares an advisor, it becomes easier to move money from one age bracket to another in order to minimize tax payments.

Skills That Pay the Bills

Here is a short list of attributes common to successful family planners:


With the honored position of family financial planner comes a tremendous responsibility. A client may share information with you that he has kept from his children, his siblings — even his spouse. The best way to avoid spilling the beans? Assume that if a client wants relatives to know something, he will tell them. And when discussing issues with other members of the clan, listen much more than you speak.


As the main source of financial counsel, your primary duty is to serve the long-term interests of the family — not your end-of-the-month commission run. Therefore, when a client asks if it is a good idea to yank a half-million dollars from his account so that he can fund a child's business idea, you need to swallow hard and present the pros and cons — just as you would want them given to you if the roles were reversed.


The “ask first, then recommend” financial planning process means you may meet several times with a particular client before he gives you his trust (and money). Some people may never even do business with you. But if the process is slowly going forward, you can bet this big decision is not being taken lightly. And be thankful for it — the more deliberate a client is in moving to you, the less likely he is to leave you on a whim.

After you have redefined your commitment to your clients and their families, I predict your production and job satisfaction will soar — even as your working hours decrease. You will have so much time, in fact, that you're likely to be able to identify your kids without the use of name tags (hint: The one in that little pink tutu is your daughter — I hope!).

Writer's BIO: Kevin McKinley is a CFP and vice president of investments at a regional brokerage and author of Make Your Kid a Millionaire — 11 Easy Ways Anyone Can Secure a Child's Financial Future.

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