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January 04, 2010 |
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Advisors Ring In New Clients |
(Dow Jones) Some financial advisory firms were anything but quiet during the holiday season.
With family members of clients visiting, advisors looking to
tap the next generation of wealth hosted year-end events and
invited clients' children to come to the office.
With two or sometimes three generations together, the
holiday season presented an opportunity to inform the entire family of
the parents' financial plans, as well as cultivate the children of
clients as future business prospects.
Jeff Rose, a financial advisor in Carbondale, Ill., rented
out a local movie theatre in early December and held a special
screening of the movie "Elf" for clients and their children and
grandchildren. In Sun City Center, Fla., financial advisor Gary Cotter
held an open house for clients with a buffet-supper and charitable toy
collection.
"Anytime from Thanksgiving to New Years is an opportunity to
meet our clients' children, who are visiting for the holidays, and
start or foster a relationship with them," says Cotter, who
met with children of client's visiting from New Jersey, Texas and other
cities in Florida.
The way Cotter sees it, right about the time his clients
pass away is when their kids will be retired and seeking financial
advice. An already-established relationship with Cotter could make for
a perfect fit.
An added bonus: "It gives the parents peace of mind to know
that I'm acquainted with their kids and the kids peace of mind that I'm
not some con-man taking advantage of the folks," he says.
Tom McGuirk, a wealth manager in Palo Alto, Calif.,
encourages clients to bring their adult children in for family trust
and year-end investment reviews. The more people in the room at the
same time when the plan is created, he says, the smoother wealth
transfer will go in the future.
During these meetings, McGuirk discusses "what-if"
scenarios, such as what happens when a parent or spouse passes away. He
also creates family binders for the children containing emergency
information including a documentation of assets, insurance policies and
computer passwords.
While McGuirk likes to make the occasion into a "family
outing" by following the meeting with a lunch or dinner, he says he
prepares for the gathering as if it were a prospect meeting.
"You don't know the next generation so you can't go in with
a set agenda. You have to listen, find out what their buttons are, and
what needs they want to address," he says.
These meetings can sometimes slide into uncomfortable
territory. Some clients don't want to divulge how much money they have.
Others don't want their children to know if their mental capabilities
have declined, for fear of their kids taking too much control of
financial decisions.
"Often, we can be an intermediary and help parent's talk to
their children about their finances," says David Kudla, chief executive
of Mainstay Capital Management, LLC in Grand Blanc, Mich. "But advisors
have to be careful to go over any delicate topics with parents first."
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Discussion
Should all advisors fall under one self-regulatory organization and could that happen on Mary Schapiro’s watch?
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