Why legacy planning is about preparing the people as well as the assets

Advisor program offers training modules plus resources to help you succeed

Why legacy planning is about preparing the people as well as the assets

There are a lot of disruptive trends going on in the financial services industry right now, but one of the biggest is what’s happening with the unprecedented intergenerational transfer of wealth.

Vanguard Canada is working with advisors on how to best provide family legacy planning to make these transfers successful. In fact, it’s offering them a holistic program that can help them accentuate the value that they bring to their clients. It includes not only information about investments, but also about building strong relationships with their clients.

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“We talk about estate planning and the actual transfer of the financial assets to an heir or another generation since the focus has typically been on preparing the assets for transfer,” Tim Huver, Vanguard’s head of distribution, told Wealth Professional. “But, family legacy planning is also about preparing the people for that asset transfer as well.”

Huver said that’s important because the initial wealth transfer will be to women, and statistics show that 70% of women will leave their advisors within one year of a spouse’s death and 66% of children will also fire their parents’ advisor after they receive an inheritance. The program emphasizes the importance of building those relationships since not doing so can put an established business at risk.

While he noted that many advisors are already focusing on this, “the importance cannot be understated”. So, the program helps advisors recognize how important the demographics of their books are and understand how to segment those, so advisors can build relationships and grow their business. It focuses on identifying the risks and opportunities. Vanguard also offers behavioural coaching training and resources to help advisors with various discussions.

“We’re finding that those advisors who have younger books are finding that they’re growing faster in terms of revenue,” said Huver, adding that’s very different than being in a decumulation phase. “So, there’s an opportunity for them to look at how they can position their book demographically toward younger clients and develop not only the assets, but the relationships.”

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Vanguard is nationally offering advisors and dealers different modules as well as facilitator guiders and other resources to have these conversations, not only with their clients, but their broader families. The resources include questionnaires as well as family meeting sample agendas.

“It’s really enabling and preparing the advisor, which can really help them walk clients and their families through the many types of conversations,” said Huver.

Vanguard is offering this program to its clients and has already provided it to about 700 primarily IIROC advisors. It is also open to providing it to others who would appreciate the additional support.

“What we find is that lack of communication and trust is the number one reason why families fail to maintain wealth during an asset transfer,” said Huver. “Part of the value that advisors bring to their clients is helping them navigate these issues today So, offering the family legacy planning program really complements those estate planning discussions that they’re having. We know those can be uncomfortable conversations, but we’re looking to equip advisors to have them.”