Practice Management

Intergenerational Advice Is Far From a Given

Surveys show a majority of advisers believe they will continue to manage their clients’ money for multiple generations, even if they don't know the heirs. 

By John Manganaro editors@strategic-i.com | December 22, 2016
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“In a relationship-focused business, advisers must make time for building better relationships, not just better businesses,” says Everplans co-founder and co-CEO Abby Schneiderman.

Schneiderman’s firm considers itself an “online estate and legacy planning platform.” As an enterprise solutions partner for defined contribution (DC) plan specialists and wealth management advisers, Everplans helps advisers help clients organize, store and share legal, financial, health care and personal information, “so loved ones can find it when they need it.”

In her role, Schneiderman naturally spends a lot of time thinking about the transition of wealth between generations—and in fact, the firm just put out a joint study with Cerulli Associates, measuring the success advisers have had in managing wealth across generations. Suffice it to say, advisers aren’t doing nearly as good of a job building intergenerational client relationships as many may think.

Of the more than 200 financial advisers surveyed, the vast majority (90%) believe they will continue to manage at least a portion or all of the assets once passed on to their clients' children. This is despite the fact that only 7% of clients' children say they know their parents’ adviser personally.

“Advisers inherently understand that they should be focusing on the next generation, but turning those good intentions into action is sometimes easier said than done,” Schneiderman adds.

In one positive finding, nearly all advisers (95%) feel they have a relationship with most of their clients' spouses; and about two-thirds of their clients' spouses are formally considered clients of the adviser. Against this backdrop, 75% of advisers surveyed remain confident that should their clients pass, spouses will keep assets with the adviser, even if they weren't the primary client.

“What if the money is passed to a grandchild? Half of all advisers believe the assets will stay right where they are even though 92% are wholly unacquainted or only quasi-acquainted with their clients' grandchildren,” Schneiderman warns.

NEXT: Boosting communication across generations