Financial advisors in Canada and the U.S. could find themselves losing clients if an estimated $30-trillion is handed down to younger generations – who have no relationships whatsoever with their parents’ planners.
“I see this more and more as a problem for advisors,” said Richard Van Liempt, president of Ortgeard Insurance and Financial Services Ltd. “But they are starting to recognize that there is business they could be leaving on the table, or allowing to go to some other advisor, if they neglect to ask the right questions and estate plan for the long-term.”
“It’s important for advisors to be a part of the conversation. I deal with a lot of these types in my book and our role is key. A lot of baby boomers, I’m finding, didn’t talk about money with their kids so a lot of them are spenders. If their parents were to pass, it’s tough for some to know what to do all the time.”
According to a recent survey conducted by Accenture Inc., less than half of heirs (47 per cent) or assets (46 per cent) stay with a firm after inheritance. However the main sticking point of the survey cites 86 per cent of advisors surveyed said they believe they understand the investment needs of both the investor and their heirs, however advisors provide services to only a third of their client’s children.
Digital strategy and technology will also become more important for advisors as according to the study, 83 per cent of advisors surveyed believe they will need to improve their digital proficiency in order to service heirs. With digital interaction becoming the norm, many advisors will have to tailor their businesses to deal with that reality.
For Van Liempt, who is based in Vancouver, it’s important to establish communications with advisors in other provinces as well due to the fact that many heirs live away from their parents. For example, one of his clients lived in Vancouver but had children living in Toronto so he sought the expertise of an advisor he could split the commission with if referred.
“Advisors have to be ready to not only retain clients, but acquire them. It may be more hassle than it’s worth with some, as an advisor I would always try to at least refer them elsewhere and take a commission split.”