Four steps to retaining your assets under management through the generations

By Anne Loehr


Is the average age of the clients in your book 65? Are you confident that all of your assets under management will remain in your hands when your older clients die? Are you willing to bet your business on it?

Successful financial advisers always look for net new assets. But what happens when high-net-worth clients pass their reins to a younger successor? More often than not, the successor will find a new financial adviser and the certified senior adviser has to do an automated customer account transfer, or ACAT, out, reducing the adviser’s assets under management.

You don’t want this to happen to you. And fortunately, it doesn’t have to — when you learn how to retain your assets through the generations.

You already know how to create deep relationships with your mature, established clients; that’s what makes you a high producing adviser. In this article, I’m going to show you how to create deep client relationships with the younger generations, too. This will allow you to maintain your assets as they are transmitted through the generations of a high-net-worth family.

It’s all about relationships

Last week, I spoke at a lunch for high-producing financial advisers in Philadelphia. During my program, I noticed that one man — let’s call him Phil — was nervously smoothing his tie whenever I talked about cross-generational selling strategies. When I asked him what was wrong, he said that he had just lost a $5 million dollar account. Phil had been working with this client, a successful doctor, for years. Unfortunately, the doctor died unexpectedly.

Phil went to the funeral and gave his condolences to the wife and grown children; he assumed that business would go on as usual. Within a few weeks, though, he was told that the son was moving the account to a competitor.

"I never saw it coming," Phil said, shaking his head woefully. “I wish I had taken the time to create a succession plan with my client, years ago.”

Just who are these generations?

To create deep relationships, it’s important to understand what shaped each generation. We all know there are different “generations,” but few of us can identify the three groups that dominate today’s workplace. According to demographers, they are:
  • Baby boomers — born between 1946 and 1960, this group is 82 million strong

  • Generation X — a smaller group at 59 million, with laser focus on results and benefits

  • Generation Y (or The Millennials) — The under-30s, a large cohort (80 million), that holds the key to how we’ll live and work tomorrow
Each of these generations was shaped by the unique political, technological and societal events that occurred during their formative years. Consequently, each generation has its own values, personality, language and buying habits.

Not surprisingly, each generation also has its own idea of “the perfect financial adviser,” and its own goals for that relationship.

How could this information have helped Phil?

We can’t know how Phil’s doctor client would have reacted to the idea of succession planning. After all, even doctors can be squeamish about facing up to their own morality. But we do know that by discussing the future and creating a multi-generational dialogue, Phil would have stood a much better chance of retaining this account when his client died.

Here are four tips to help you create succession plans that will keep your clients’ assets in-house, across several generations:
    1. Do your homework
    First, identify your client’s generation. He or she may be a baby boomer or a “traditionalist” who fought in World War II.

    Now find out who the successor is, and what generation they belong to: Are they from nose-to-the-grindstone Gen X or from environmentally-conscious Gen Y? Are they a legacy-oriented boomer or a conserving traditionalist? The answer will give you a surprising level of insight into their priorities.

    2. Meet the successor — and make it social
    Now it’s time to begin establishing a relationship with your client’s successor, and even in today’s digital age, the strongest relationships grow from face-to-face interactions.

    So based on your client’s and the successor’s interests, invite the family to an elegant dinner, show or a casual community event. Eventually, you’ll want to have an intergenerational meeting that leads to a succession plan. For now, though, plan to keep things strictly social; bonds of trust will develop with time.

    3. Prepare to meet with both client and successor
    Let’s imagine your client is Marie and her son, the successor, is Marc. You may need to meet Marc socially a few times before he agrees to a financial business meeting. Marc may not be interested in learning about Marie’s financial details. Alternatively, Marie may not want Marc and the other children to know all her financial details. Family wealth can be challenging to discuss, so be patient and take your time before inviting Marc and Marie to an intergenerational financial meeting.

    Once you’ve scheduled this multi-generational meeting, add one more task to your usual preparation: Review your product offerings — and your client’s existing portfolio — in light of each generation’s values, priorities and investment time frame.

    Ask yourself things like: Will 36-year-old, GenXer Marc want to discuss retirement options? And what’s most important to a Marie, as a baby boomer who may be thinking about her legacy?

    Write down and practice specific phrases, stories or value propositions that speak to each of these generations’ concerns. Be sure that you understand which argument or supporting evidence works best for each generation.

    4. Hold the intergenerational financial meeting
    When you meet with Marie and Marc, areas to discuss will include assets, inheritance plans, timing and long-term health care.

    Even when presenting basic financial information, you may find it necessary to state things differently to each of them. You may even need to make certain points twice — once, with regards to the concerns of Marie, and once with a focus on what’s most important to Marc. By speaking to each generation on its own terms, you’ll build the trust and credibility that allows everyone to reach their goals.
Mastering a new approach

Mastering these ideas may seem like a large mental shift, but you don’t have to do it all at once. This week, take 15 minutes to learn about the generations. Next week, ask two of your clients about their successors. After six weeks, you’ll be far along in creating succession plans for your clients; in building cross-generational relationships; and in meeting your goal of retaining assets.