Blog: Talk to the Kids


One of the most effective ways to grow your client base and to increase the loyalty of your existing customers is to develop a relationship with the entire family, not just the family members with whom you have already established a relationship. Spectrem Group has been pushing this concept for many years and has often received push-back from financial advisors. But as we continue to conduct research with investors, it has become increasingly clear that this communication step has become increasingly important.

One of the primary reasons to develop a relationship with the family members is because of decisions that need to be made upon the death of your existing clients. In our recent study, Down to the Last Detail:Setting Your Financial Affairs in Order, Spectrem found that there is a significant disconnect between the actual level of preparation and the perception investors have regarding whether they are prepared for end-of-life decisions. While 86% of investors indicated they feel they are prepared, more than a third have not identified beneficiaries on their accounts and fewer than two-thirds have a will. Fewer than half have a living will, financial power of attorney or medical power of attorney. All of these decisions are generally family-based decisions that provide an opportunity to involve the next generation in discussions. And why should advisors solicit these types of meetings? Because more than half of investors who have been involved in helping to finalize the estate of a loved one have started using the advisor of their loved one to some extent.


Another reason financial advisors should begin to reach out to and meet the entire family is because younger investors would like their financial advisor to provide education to their children regarding financial topics and ultimately to provide them with financial advice. According to Spectrem’s report, Parenting and Financial Issues, 39% of Millennials and 31% of Gen Xers would like their financial advisor to provide financial education for their children. Interestingly, 55% of Millennials, 46% of Gen Xers and even 30% of Baby Boomers would like their financial advisor to provide financial advice to their children. Overall, 48% of all investors indicate they will involve or have involved their children in their estate planning activities. Financial advisors must take advantage of this opportunity, not only for their own benefit but to truly assist their clients on a holistic basis.

Spectrem has asked investors how old children should be in order to be introduced to their financial advisor. In our study Effective Communication Techniques for Attracting and Retaining Next Generation Clients we found the largest percent of wealthy households indicated that 18-25 is the appropriate age for a child to be introduced to their financial advisor. How many of your clients have children that age or older that you have not yet met?

Ten years ago when Spectrem conducted focus groups with wealthy elderly investors we often found that many WWII generation investors were reluctant to discuss their financial situation with their children. Many would say, “It’s not really any of their business”. Today that attitude has changed significantly. Perhaps because of Baby Boomers who were surprised when their own parents may have passed away? Regardless of the reason, today investors want their children to meet their advisor for multiple reasons. Not only does it help the advisor retain and attract clients, it’s beneficial to the overall planning for the investor and his or her family.

Have you talked to the kids yet?