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Worried About Wealth Transfer? It’s Time for the Human Touch

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When my husband and I got engaged a few years ago, we were both well into our careers, and we each had our own financial advisor. It wasn’t surprising that both advisors reached out to us, but their approaches were as different as night and day.

I stumbled on the letter from my husband’s advisor almost by accident. Jumbled in with the junk mail, his mailer looked a lot like yet another offer for a new credit card—complete with the “insert name here” format. The form letter congratulated him on his “happy life event” and included a bulleted laundry list of generic action items (draft new wills, review your investment accounts, consolidate your budget), and even presumed that we would choose to move my assets to his firm: “I’ll go ahead and put the transfer papers together to begin the process of adding your fiancée’s accounts.” He didn’t even call me by name. I was stunned. Could his letter have been any less personal… or any more presumptuous?

A few days later came a small, square package from my own advisor. In it were two large cupcakes complete with bride and groom cake toppers. Tied to the box was a handwritten note of congratulations to us both. It couldn’t have been more simple or any more sweet.

I’m sure you can guess which advisor is now managing our joint assets. I had absolutely no desire to even meet my husband’s advisor, and while I’m certainly not among my own advisor’s top clients, he impressed us both with his personal and very human touch. It enriched the relationship with both his existing client (me) and the man who was soon to be my husband. It was a win for all of us.

Of course, finding just the right gesture that’s right for each client isn’t always easy, but making the effort to communicate the right way with the right people at each life event is vital for advisors who hope to retain assets in the face of a possible wealth transfer. Unfortunately, my husband’s ex-advisor isn’t alone in his inability to tread this often tricky and even delicate path. While his approach was painfully bad, many advisors who attempt to make this connection aren’t going about it in a way that expands existing client relationship to include the client’s spouse, adult children, or other heirs. It’s no wonder a recent survey by InvestmentNews found that 66% of children fire their parents’ financial advisor after they receive an inheritance. If there’s no relationship, there’s no trust. And no matter how closely you’ve worked with your client to build and protect his or her assets, retaining those assets after the death of your client or another significant life event is anything but a given.

So how can you become sure you’re among the 34% of advisors who create relationships that help retain assets across generations? By fostering relationships with the whole family from day one of the client engagement. While the most appropriate action will vary depending on the client and the occasion, here are three rules of thumb when finding ways to create your own “human touch”:

Focus on the next generation.

When a client’s adult child is getting married, send a small wedding gift with a handwritten card. If your client is thrilled at the arrival of a new grandchild, send your favorite children’s book with a personal note written on the inside. You’ll be remembered kindly with every “once upon a time.”

Make every touch personal.

Is your client an avid reader? Send them a copy of your favorite novel on Booklovers Day (August 9). For client’s who have lost a spouse within the last year, send a note of encouragement when they may need it most of all: as they head into the holiday season alone for the first time.  

Reach out to “invisible” spouses.

It’s easy (and all too common) to spend years working with a client without even meeting his or her spouse. Strengthen this relationship by emailing your best recipe for Men Make Dinner Day (the 1st Thursday of November). It’s just quirky enough to be remembered, and a note that says, “Happy wife, happy life!” will surely be talked about when dinner is served!

Remember that life events put money in motion, and people tend to make knee-jerk reactions to those events—whether the changes are happy events like a marriage or the birth of a child or grandchild, or unfortunate events such as divorce or the death of a spouse or parent. That means that if you find yourself meeting the family for the first time at your client’s funeral, you may as well hand over the transfer paperwork with that initial handshake. Instead, take the time to create strong relationships with multiple family members as smaller life events happen. If you do, it’s much more likely that you’ll be the first one they turn to for guidance when bigger changes occur. And once you’ve established that level of trust, chances are even better that you’ll also be the one the entire family chooses to manage their wealth for generations to come.

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Disclosure:
The information and opinions herein are for general information use only. The opinions reflect those of the writers but not necessarily those of New York Life Investment Management LLC (NYLIM). NYLIM does not guarantee their accuracy or completeness, nor does New York Life Investment Management LLC assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are not intended as an offer or solicitation with respect to the purchase or sale of any security or as personalized investment advice.
All investments are subject to market risk, including possible loss of principal. Diversification cannot assure a profit or protect against loss in a declining market. There can be no guarantee that any projection, forecast, or opinion in these materials will be realized. 
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