The intergenerational wealth of a family is at risk unless an advisor understands the causes of the “shirtsleeves to shirtsleeves” experience that destroys wealth by the third generation. We will explore all of these various causes in a series of separate blogs but, for now, here are five top things that advisors can do to grow a client family’s wealth for the long term:
- Adopt an Abundance Mentality;
- Take a close look at the process you have for your clients. Try to take the client’s perspective and ask yourself “who is this process really serving, ME or the CLIENTS?
- Examine your circle of allied professionals and ask yourself the same question- “How do we function as a multidisciplinary team to serve our clients?” ;
- Identify your top 20 client relationships – take 11-20 and ask “What do I really know about these clients and what their planning goals really are? Be fierce about discovering their true motivations!!
- Create a strategic process intergenerational wealth planning model for your clients – start at values and goals then proceed to tactics
Let’s examine each one a little more closely.
Adopt An Abundance Mentality:
The fact is that most advisors and their clients view the world through a lens of scarcity. It’s human nature and we all do it unless we have carefully designed processes to improve our decision-making analysis. Advisors fear losing clients or the wealth of a client while clients fear losing their financial wealth more than they are able to focus on it’s abundant, long-term potential. In fact, as Daniel Kahneman and Amos Tversky suggested with Prospect Theory, most people substantially fear a loss over a similarly sized gain. Fearing loss results in stilted and tunnel-visioned planning that misses the opportunity for growth and abundance in client estate planning.
Instead of the tunnel vision of scarcity, advisors should help clients develop a decision making process that features the abundant estate potential of every financial situation. We should ask, “where are the opportunities to invest in and grow our family’s human, social and intellectual capital?”.
Whose Needs Does My Process Serve?
Checklists are an incredibly useful tool to ensure that the essential steps of a critical process are followed. They remind us of small and key steps that can easily be forgotten. However, checklists and best practices are usually prepared by the advisor and applied generically to every client. The perspective of the checklist is that of the advisor. It is often a process of ticking boxes to protect the advisor’s interests.
Ask yourself some basic checklist testing questions:
- What is going on that has brought the client here today?
- What questions would a client ask of me but which are not on this checklist?
- What could go wrong in this situation which isn’t revealed by the answers to the questions on my checklist?
- What assumptions and beliefs not revealed from the checklist, if proven incorrect, will destroy this plan?
- Have you dug in deep enough? Did you dig in at all? Did you ask fierce and difficult questions that tend to be uncomfortable but which create planning breakthroughs as the client’s real needs and fears are finally exposed?
- Did you ever veer from the checklist or best practice out of curiousity?
Remember, a good checklist is not the end of the discovery, it is just the beginning. And, a best practice for a family is only the one that is best for them.
My Multidisciplinary Team
Clients, especially the high net worth, are expecting and receiving integrated multidisciplinary experiences from their advisory teams. The rise of single and multi-family offices is a testament to the truly aligned potential of an advisory team. It works very well for everyone involved. In fact, research suggests that advisors experience increased business through a commitment to engaged team collaboration.
Building your own team or developing your skills at being a collaborative and a high functioning team member is, in part, about adopting an abundance mentality and enhancing your processes to respond to authentic client needs.
Build From Within
Your best clients are the ones you already have on board. They chose you and have stayed with you through the great moments and the trying times. Have you made any effort to discover the real reasons for their loyalty and commitment? Why did they choose you? What is your value proposition with every client you manage and advise? Is it a commodity or is it strategic?
Understanding your own goals and values is essential to building connectivity across the generations of family wealth. Clients will understand the importance of planning for their family wealth as a values-driven process if you can explain your own mission in life and work. The law of attraction suggests that referrals will be better and your multidisciplinary professional team will be deeper and stronger if your purpose is at the core of your abundant-minded business model.
Build this process out onto your clients starting with your bench. Typically, your top clients are already likely to get your most frequent and regular attention. The next tier, maybe 11-20, are still part of your pareto-efficient book analysis for future growth and value. Create a new, authentic and purposeful process for them to help with their intergenerational decision making in all aspects of their family wealth.
Build a Process for Helping Your Clients Grow Their Intergenerational Wealth
The Naked Opus: Growing Your Family Wealth for the Long Term suggests a five step process for growing family wealth for the long term. It’s a flexible model that can be manipulated and retooled to fit the authentic planning needs of every family.
It starts with communication and values, builds towards alignment around mission and features The Abundant Estate with the SMRT strategic engine for family wealth decision making.
Chris Delaney, B.A., LL.B., B.Ed., TEP, FEA is the Author of “The Naked Opus: Growing Your Family Wealth for the Long Term”. He is a Professional Speaker, Lawyer and Family Wealth Strategist focussing on helping families and their advisors grow true family wealth for the long term.
He can be reached on twitter @FEAdvisor and @NakedOpus. Please also visit www.nakedopus.com for additional contact information.