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Twenty Over Ten

How Advisors Can Keep More of Their Clients’ Kids as Clients

Much like health insurance, advisors can offer to provide free financial advice for clients' children until they reach 26 years old.


Studies show 80% or more of clients’ children will leave their parents’ advisor once they receive their inheritance.

Eighty percent. Just think about that for a minute. That means for every five clients you have right now, four of them will be passing their wealth on to their heirs and you will no longer be managing their assets.

Add to this the fact that we are now in the midst of “The Great Wealth Transfer” (Cerulli Associates estimates that nearly 45 million U.S. households will transfer a total of $68 trillion between generations in the next 20 years) and advisors are beginning to be concerned, and rightly so.

For years our industry has been focused on client retention, but now an additional question—“How do advisors keep the children of their current clients?”—is taking center stage.

I brought this very question up in a recent conversation with a financial advisor. And he shared a brilliant solution his firm has been using to retain current clients and attract their children.

The solution? Offer free financial advice to the children of clients until they’re age 26.

Why age 26? Well, it aligns perfectly with the age at which most children are removed from their parents’ insurance.

And while 18- to 26-year-olds may not be as concerned with their financial lives as college and career lie ahead of them, recent research from the Spectrem Group showed that 20% of investors with $25 million-plus want their advisor to establish relationships with their children when they are as young as 18.

So, I went to social media to see what other advisors thought of this approach (Here are those discussions on LinkedIn and Twitter). The feedback was phenomenal, with the majority of advisors agreeing that this is a great approach. But they also offered some guidelines to make sure the program works for you and your firm:

  1. Set parameters. What will you offer for free? How much time can you commit to your clients’ children? How accessible will you be? Setting these parameters will help you measure what works best for your firm.
  2. Your client’s child needs to initiate the conversation. Your clients’ children will want financial independence from their parents and won't be drawn to something forced on them. Think about how you would appeal to the children of clients to show your services as an advantage. And approach the situation like any other client. The buy-in from the child is incredibly important for this strategy to work.
  3. Be clear about what happens at age 26. Services will no longer be free, so what will payment structures look like? Will they work with the same advisor at your firm? What services will they have access to? Making these things clear will help your clients’ children understand exactly what will occur when they turn 26, and makes sticking around that much easier.

Offering clarification and demonstrating the advantages of this program provides a world of difference. Of course, whether your clients’ children stick around will be entirely up to them.

As an added benefit, assisting your clients’ children will also please your current clients. After all, what else would make someone happy if not providing financial support for their children’s future?

Samantha Russell is the chief evangelist at FMG Suite. Sam helps financial advisors create digital marketing strategies that produce explosive growth through website development, content marketing, SEO, social media and video. Learn more about Samantha

TAGS: Marketing
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