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Consumer Insights offers an exclusive series of articles analyzing the results of the on-going Financial Comfort Zone Study, conducted by Missis­sauga, Ont.-based Credo Con­sulting Inc. in partnership with Montreal-based TC Media's investment group. (Investment Executive is published by TC Media's investment group.) The survey, conducted monthly in English and French, is designed to gain insight into the relationships among financial advice, financial well-being and overall life satisfaction in Canadian society. The number of respondents is expected to grow to 12,000 within 12 months.

Clients who have a will report greater satisfaction with their advisors

By Rudy Mezzetta | November 2017

Canadians who have a will as part of their broader estate plan are much more likely to trust their financial advisors and less likely to consider switching advisors, according to recent research by Mississauga, Ont.-based Credo Consulting Inc.

Among the Canadians who were surveyed, those who have a will gave an average score of 7.94 out of 10 for the statement: "I trust my financial advisor completely." In contrast, Canadians without a will gave the same statement an average score of 7.34.

Similarly, the Canadians participating in the survey who had a will gave an average score of 2.47 to the statement: "I'm considering finding a new advisor." In contrast, survey participants without a will gave the same statement a significantly higher average score of 3.97.

These findings were drawn from research conducted by Credo for the Financial Comfort Zone Study, an ongoing national consumer survey, in partnership with Montreal-based TC Media's investment group. (TC Media publishes Investment Executive.)

Your clients often don't consider the negative consequences that may arise from not having a valid and updated will in place, says Paul Fensom, director of estate and trust services with Bank of Nova Scotia's wealth- management division in Toronto.

Dying without a will may mean that assets aren't divided in a way the deceased wished or that loved ones are left scrambling to administer the estate without any guidance or direction. "[Having a will] helps you avoid unintended consequences," Fensom says.

Adds Amy Dietz-Graham, portfolio manager and investment advisor with BMO Nesbitt Burns Inc., in Toronto: "[A will] is your last word as to what you want to have done. And because life gets complicated and things change, a will needs to be updated constantly."

Advisors are in the best position to motivate their clients to take action in preparing a will, says Christine Van Cauwenberghe, vice president, tax and estate planning, with Investors Group Inc. in Winnipeg: "Clients aren't going to go to the lawyer without some prodding on the part of their advisor."

You should be able to refer your clients to at least three lawyers who prepare wills, preferably professionals who have accreditation in estate planning, Van Cauwenberghe suggests.

Clients often are more receptive to the concept of getting a will done after a major life event, such as a marriage, a divorce, a birth or a death. Age also is a key determining factor: only 11% of Canadians who participated in the survey and are between the ages of 25 and 35 have a will, vs 86% of those 65 years of age and older.

"Often, at retirement or when people are converting an RRSP to a RRIF, they begin to turn their mind to how their retirement and wealth transfer plans are going to be mapped out," Fensom says.

However, psychological barriers sometimes prevent younger people from having a will prepared, says Sara Gilbert, founder of Montreal-based Strategist Business Development: "They unconsciously think to themselves, 'If I get a will, that means I'm preparing to die'."

The irony is that often younger people are the ones who need to set up a proper will and estate plan the most, Van Cauwenberghe says: "The most important time to have a will is when you have young children, or if you have a dependent - someone who's counting on you and who would really suffer if something happened to you."

To convince your clients of the merits of having a will, you should help your clients "connect the dots" in terms of how not having a will would affect their families.

"When you look at a client's life scenario, identifying a need usually is pretty easy," Van Cauwenberghe says. "You don't need to cover every item. Just identify one soft spot that the client may be interested in talking about and open up the conversation that way."

Although you can't draw up a will on a client's behalf, you are well positioned to review it to flag potential pitfalls, Van Cauwenberghe says. For example, you can review designations of executors or guardians for their appropriateness or see if gifts to children are set up properly.

You also can stress the importance of communicating the key contents of a will to executors and family members.

"You don't want the first time [your family] reads the will to be after you're gone," says Dietz-Graham. "What if there are questions or a misunderstanding of what you meant?"

Clients who go through the process of getting a will prepared as part of their larger estate plan are satisfied about ensuring their legacies are in order, Dietz-Graham says: "They leave our offices feeling that 'I've covered [the estate plan]. I have peace of mind. I don't have that lingering feeling over my head of [not] getting my will done."IE

The online Financial Comfort Zone Study has polled 24,000 Canadians thus far. The survey is meant to gain insight into the relationships among financial advice, financial well-being and overall life satisfaction in Canadian society. Canadians are polled monthly, and the number of survey participants will increase each month.

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