Bringing family members into the conversation early in the advisor-client relationship not only prevents problems down the road, but it can help recruit next-generation clients. These prospects are commonly overlooked because of the large time commitment and small financial return, at least initially, but courting them can ensure future business and help retain assets inherited from their parents. Advisors with an eye toward the future have made family meetings a regular part of their practice and employed various other tactics to usher in a new era of business.

Starting off right

James J. Silbernagel, LUTCF, CFP, a 30-year MDRT member from Kewaskum, Wisconsin, USA, said he’s made the meetings mandatory so that family members, particularly those serving in roles like power of attorney or executor, “get a chance to know us in a non-stressful situation.”

Advisors miss a big opportunity when they focus on the parents and overlook their children as potential clients, according to Silbernagel.

“I hear a lot of advisors, who I think miss the boat, say, ‘I don’t work with the kids because they don’t have enough money,’” he said, adding that 90% of clients’ children ultimately leave their parents’ advisor. “I didn’t work this hard just to have everything walk out the door.”

Silbernagel started making family meetings a requirement about 10 years ago, but scheduling a meeting back in those days often was difficult. “I have a lot of farm clients with large families, so pinning them down could be a challenge,” he said. 

While meeting in person is preferable for Silbernagel, the adoption of video calls during the pandemic made meetings easier to schedule. Lack of communication tears a lot of families apart, so Silbernagel said he first establishes who will serve in key roles such as power of attorney and executor. He also provides them with more than two dozen discussion topics to consider and gets family members involved by having them make sure mom and dad did the homework.

“We establish the ground rules at the first family meeting,” he said, noting that it sets the stage for making family members aware of the client’s expectations. “It’s one thing to have it on paper, but it’s another thing to discuss what the intentions are.”

That could mean reviewing issues like family vacations and inheritances. Silbernagel asks if they take vacations every year and whether they would like that to continue. He also drills down on topics such as money left for the grandchildren: “Do they want the kids to have the money right away, or will that only be available for college? And is it a free ride to college, or are there ground rules?” Silbernagel asks.

These early conversations build familiarity and comfort with the advisor, which often leads to next-generation clients down the road, he said. “They don’t have the extra stress later of wondering who you are and whether or not they can trust you,” he said.

For Kathleen R. Benjamin, CFP, CPA, a 20-year MDRT member from Maugansville, Maryland, USA, involving children in the financial planning means helping them understand their parents’ objectives and how their financial plan is structured.

“If they understand the plan and the thoroughness of it, they’ll also appreciate the level of work and care that we’re taking,” she said. “You’re kind of partnering, and it’s a relationship that’s not transactional.”

The more value you bring to the table, the more likely next-generation clients will stay. Benjamin said the first conversation with the clients’ children typically happens when the child begins their first job and has questions about their benefits, including the company’s retirement plan. Later, when the next-generation client gets married or buys a house, advisors typically would begin discussing life insurance and disability insurance. All of this work to build a relationship with the client’s children can also help retain assets.

“Once they have a home or some kind of financial commitment, or they have a significant other, that’s when it is important to continue educating them and help them understand things, like more homes are lost due to a disability,” she said.

Staying connected

Making contact early with the children is only the first step in building a next-generation book of business.

Kathy Kueider, CLU, ChFC, a 30-year MDRT member from High Point, North Carolina, USA, said she learned years ago that to build relationships with younger clients, you have to meet them where they live — on social media.

“I started reaching out to my existing clients to find out more about their children and ask permission to connect with them on social media,” she said. “This idea is more than 10 years old but is still effective in connecting with that next generation that will be inheriting a mass of wealth at their parents’ death.”

She typically reaches out via Facebook or LinkedIn with a simple message: “I just met with your parents today — they tell me you’re doing great in your profession. Please let me know if you have questions around financial planning and how we may be of service to you. Look forward to connecting with you soon.”

Once a client reaches a certain age, she asks that at least one of their adult children accompany them to meetings. She stays in touch with occasional messages asking for a quick phone call or sharing an article on retirement investment accounts or the impact of compound interest, which she reminds them is “the eighth wonder of the world.”

“If you’re doing regular social media posts, they’ll see your content on a regular basis anyway. It’s a good way to drip on them with ideas and keep your name in front of them,” she said.

Mark E. Friese, CMFC, a 26-year MDRT member from Libertyville, Illinois, USA, takes a similar approach, keeping a close eye on potential next-generation clients on Facebook. “It makes it really easy to reach out and make a personal connection,” he said. 

If the grown child of a client has a baby, for instance, Friese will send them a congratulatory message and information about college savings. “Stuff like that shows them you’re paying attention,” he said.

Friese also reaches out to express condolences when a client’s pet dies.

“We make a donation to the Humane Society in honor of their pet, and they send them a little card,” he explained. “You won’t believe how much that means to somebody.”

Friese also uses the database content management system, Constant Contact, to remind him and his staff to periodically send age-appropriate messages. If a client is in their 20s, they are not likely to care about information about Social Security, for example.

“But somebody in their 60s would find that information useful,” he said. “That’s the beauty of Constant Contact. You can break these groups down into subsets and market appropriately to that particular group.”

Next-generation strategies

When connecting with next-generation clients, it can help to have someone from their cohort on your team. Friese hired a younger advisor a few years ago who brings a level of comfort to clients who are in their 20s.

“You’ve got to speak their language,” Friese explained. “They want to text you all the time, so we have to use a texting app to have it archived for compliance purposes, so we can text them.”

In addition to the texting app, Friese makes inroads with younger clients through an app provided through an investment company he works with as a third-party management advisor. There’s no minimum balance to set up an account, which can be helpful for clients with little to no assets, he said.

“It’s a very useful app they can use to monitor their accounts, so it just helps us connect,” he said.

Benjamin agreed that next-generation advisors are key to retaining next-generation clients. Some advisors prefer to not deal with younger clients who are just beginning to build their financial future, but like Silbernagel, she said that means leaving money on the table. Recruiting next-generation advisors is important so that when her older clients’ kids come in, they have an advisor who looks like them.

“I know some financial advisors who would only help a client with their insurance needs and not handle their investments,” she said. “To me, it was important to help an individual with both insurance and investments since it was important to address their whole financial world since it’s all interrelated.”

She also uses the visual aid of a family tree to build a clear picture of which roles family members play in the client’s life as well as how various family members may impact the client’s financial plan. She would say to the client when completing this family tree, “We want to know who is in your world who either could cost you money, leave you money or what obligations you may have as a responsible party to someone else,” she said. “It was really just being able to identify the peripheral people in their world as well.”

That includes collecting contact information, residence information and date of birth. It’s a living document which would be reviewed each year to check if any of the roles or other information has changed.

Getting to know the clients better and learning more about the decision makers in their lives can lead to introductions to next-generation clients. Benjamin hears from clients who want to introduce her to a family member by telling her, “I think they could use what you’re doing for us.” It can also help retain assets.

“That’s a big part of what’s happening right now with the aging population — are you going to be able to retain those assets under management?” Benjamin said.