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Connecting with Clients' Families Is About More Than Retention

Connecting with Clients' Families Is About More Than Retention

For advisors, having conversations with clients around wealth planning and family engagement is more than a way to retain them long-term; it can be a good growth strategy. 

Walking clients and their families through issues like charitable planning, estate planning and caregiving is the first step to developing a long-term relationship with the spouse and children of advisors' clients. But it also gets them thinking about consolidating their assets, Andrew Hamil, national manager of Fidelity’s trust and estate consulting group, told attendees at FSI's Advisor Summit on Monday.

“It forces clients to divulge their assets,” Hamil said. On average, clients have their investments spread across four advisors, according to research by Cerulli Associates. But instead of seeing that as a negative, advisors should see that as an opportunity, he said.

“Those assets are in play today. And if you’re not talking and engaging with the entire family, chances are, someone else is,” he said. Hamil said among Fidelity's high-net-worth clients, consolidation is cited as the top reason for leaving the firm—and the underlying reason is usually that the client is finding better communication and relationships elsewhere. 

And there’s a definite need for these conversations. Less than one in three high-net-worth clients’ wealth transfer plans succeed with family harmony still intact (and no litigation), Hamil said, citing a recent study by the Williams Group.

Additionally, Fidelity’s 2014 research found that half of clients don’t have confidence their partner/spouse could manage their investments should something happen to them unexpectedly. Only about half of parents reported having estate planning conversations with their children.

Hamil said retention does come into play as well, but added that it's an area where advisors are still struggling to find success. Only about 30 percent of widows and 2 percent of children retain their husband’s/father's advisor, Hamil said.

“If you’re not engaging the spouse, you’re never going to get to the kids,” he said. 

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