Estate, Succession and Financial Planners: Why You Need A Holistic Approach For Clients

A catastrophic societal and familial tsunami is coming that will forever alter the basic fabric of our families and communities.

It is no longer a question of ‘if’ it will happen or ‘when’ but right now, we need to address the questions of ‘what’ we can do to mitigate the impact and ‘how’ to preserve what we still possess. The wisdom that has been passed downfrom generation to generation, typically through stories shared by elders with their young around the dinner table or at family gatherings is no longer happening.

Through advances in medicine and health care we are living longer. Our affluence has allowed for greater mobility and our technology has enabled us to stay in touch despite geographical separation. The extended family and the benefit provided is becoming extinct. We are communicating more but connecting less. The wisdom gained through sharing stories of life experience and expressions of deeply held values cannot be conveyed with 140 characters in a tweet.

The damage wrought by these changes in the family dynamic can be found in many places but very clearly defined by an adage familiar to Succession Planners:

Shirt Sleeves to Shirt Sleeves in Three Generations

This adage and the problem it defines is not confined to our culture and country as versions of the same can be found in many cultures and countries. But there can be an antidote for this condition. Wealth, divorced from the wisdomthat created it is sure to be wasted. Estate and Succession Planning has done a tremendous job of passing the ‘cake’ to future generations, but unfortunately in too many cases, the ‘recipe’ is taken to the grave.

If there is a hope for those descendants to whom the wealth passes, to shoulder the responsibility of preserving and perpetuating that wealth, they need to be vested in the Family Narrative. But how can they be vested when they don’t know that narrative.

Family histories are an important vehicle through which to create this feeling of connectedness and an “intergenerational self.” While the process of expressing family histories should not be limited to a particular time of year, a holiday season in which many families get together may provide an opportunity to begin to share a family narrative. The development of this narrative has the potential to serve as the scaffolding for adding meaning to the life of each family member.

The public overwhelmingly wants to do something to preserve and pass on their life lesson and values more so even than passing on their wealth as reflected in the Allianz American Legacies Pulse Survey by a factor of 8 to 1. But it’s NOT happening.

What’s at Stake?

The amount of wealth set to cross generation lines is arguable, being cited as anywhere from $30 to $59 Trillion. Regardless of the amount the outcome is predictable:

Over the next 30 years, an epic $30 trillion will be passed down from baby boomers to Generation X to millennials. In that enormous transfer of wealth, many investment advisers will see their hard-earned asset base evaporate — and the value of their firms plummet — because they don't know how to connect with their clients' children. The problem is especially difficult for the many advisers ill-equipped to connect with clients who are technology savvy and expect a very different service experience than their parents did.

The simple, undeniable truth is this: Sixty-six percent of children fire their parents' financial adviser after they inherit their parents' wealth.

Advisers unable to prove they are effective at establishing relationships with clients' children and serving the next generation also will discover their businesses are worth less to potential buyers, experts said.

Relationships are built over time and the time to build the bridge to the surviving spouse and succeeding generations is before it’s needed. When it comes to the surviving spouse, their priorities are often different, family relationships matter more than return on investments. Advisors who do not recognize this disparity or offer guidance to strengthen the familial bond will be replaced.

Responding to this lopsided situation

Legacy Stories has spent the past decade working within the Elder Care Continuum, with professionals and care recipients. The object was not to find more reasons for people to build a meaningful legacy, but to find the reasons why they don’t. The result of our study is embodied in our state of the art technology platform, programs, protocols, and tools.

Our purpose is not only to raise awareness of this problem and its solution but to also build a network of professionals to provide advice and guidance. If we can get people to understand the problem and help them take the first steps in rectifying, we stand a fighting chance subsequent steps will be taken.

LegacyStories.Org has built a comprehensive, self-guided Legacy Building platform that encourages and empowers clients to begin this rewarding process. Advisors don’t need to be actively engaged to reap the benefit of a deeper and more enhanced client relationship. The program also offers significant marketing / branding tools to attract new clients.

Professional advisors: Estate, Succession and Financial Planners need to adopt a more holistic approach when advising clients. Regardless how effectively you perform as a tool to protect and increase wealth, building a legacy builds a bridge to the future. And in the end, Builders are embraced, and tools get replaced.