“Coach’s Forum” is a place in which you can ask your questions, tell your stories or give your opinions on any aspect of practice management. For each column, George selects the most interesting and relevant comments from readers and offers his advice. Our objective is to build a community of people with a common interest in making their financial advisory practices as effective as possible.

Advisor says: well, it’s happened again. I just lost another large account due to the death of one of my best clients. I always thought I had a great relationship with him and I have met all of his family several times, so I was quite surprised to see the transfer papers come in within less than a month of his death.

I contacted his wife right away to ask why she was transferring to another financial advisor. All she would say is that her son had a relationship with someone else and he felt it would be better if they had everything at one firm.

As much as I don’t like losing an account, the real concern for me is that I have a significant number of elderly, retired clients. And the law of averages means there will be an increasing proportion of them likely to die every year. I am adding only a few new clients here and there, so I can foresee my book gradually diminishing over time.

What can I do to hang on to those assets?

Coach says: first off, you are far from alone in having this experience. Research shows that most adult children intend to fire their parents’ financial advisor once those children have inherited their wealth.

The reasons for moving the account are many: the heirs need the money; they already have an advisor; they live in another part of the world; or they simply feel they think differently about money than the “older generation,” so they assume the parents’ advisor wouldn’t connect with them.

I bet, however, the truth is that your client’s wife and son probably do not know about or understand the services you provide and how those services might fit into their own lives.

Offer a family meeting service

That is why I am a big fan of adding family meetings to the services you offer clients, so you can build relationships with heirs and improve your chances of retaining assets. As an advisor, you already are skilled in listening and drawing out client objectives. So, conducting family meetings simply is a logical extension of what you already do and an enhancement of your value proposition.

Those meetings could focus on a variety of topics, such as:

– Financial education for teens and young adults, to help them understand the types of financial decisions their parents are making. (Do not disclose specifics of the parents’ situation without express permission.)

– Wills and powers of attorney reviews with parents and adult children to introduce the notion of wealth transfer and the responsibilities that come with it.

– Annual financial updates with parents and adult children to keep everyone apprised of the parents’ financial situation, to ensure children will be prepared to assist if needed and prevent surprises upon transfer.

– Family governance for high net-worth families, including other professional advisors, to discuss how the family can sustain substantial wealth over multiple generations.

Be sure to let current and potential clients, as well as your centres of influence, know that you now have a family meetings service by showcasing the fact in all of your marketing material, and specifically in your capabilities brochure and on your website. Make this service a featured topic in your newsletter or a seminar.

Space does not permit me to get too deep into the mechanics of family meetings. However, I recommend that you find a style and structure that suits both your personality and that of your clients. Here are a few other thoughts:

Dealing with reluctant clients

Some clients may be uncomfortable with the thought of a family meeting for fear their privacy will be violated. Position the meeting’s purpose as providing heirs with the opportunity to understand how financial decisions are being made. Again, assure your clients that no specific financial or account information will be revealed without their direct consent. You also can point out that sooner or later, their estate will be left to someone close to them and the goal is to make the transfer process as simple as possible.

Tell these clients that it helps if a third party (you) explains what will happen in the event of the client’s death, so heirs have the opportunity to understand their role in the process and can be prepared.

As an advisor, you have a responsibility to contact appropriate family members to discuss how a client’s assets will be handled in the event of that client’s death. Having that conversation with people you have met previously to discuss carrying out the plan will be easier for everyone.

One advisor I know who has great success in retaining assets upon the death of a client sets the stage for a family conversation by including a few key questions on her client reviews’ agendas: “Is it your wish when you die for us to continue to manage your money on behalf of your heirs? Is there anyone among your heirs who is unlikely to work with us? If so, why?”

These questions set the expectation early on that this advisor wants to work with her clients’ children. This advisor also finds that these questions prompt her clients to advocate to their children that the clients’ assets should remain where they are.

Who should you invite?

The answer to this question will depend upon your client’s life stage, the complexity of his or her financial affairs and the people who will be the recipients or guardians of the assets. For clients with simple estates, having just the children at the meeting is fine. Clients with more elaborate estate plans may want to bring in other family members, executors and other “trusted advisors.”

Your role as facilitator

Once a client agrees to a family meeting, your next role will be to facilitate the event. Even if that’s outside your personal comfort zone, remember that in addition to helping your clients with an extremely important aspect of managing their affairs, this event also is your opportunity to showcase your capabilities in front of your clients’ heirs. You might be reassured by research that found that most clients would encourage their advisor to discuss wealth-transfer issues with their children. And, similarly, many adult children would encourage their own advisor to do the same with their parents.

Be prepared for difficult conversations. Depending upon the family dynamics and dialogue that has taken place previously, attendees may be either well informed or completely oblivious regarding their parents’ financial affairs. You probably will know, from prior conversations with your clients, what to expect. Remember (again!) that it is not your role to persuade your clients to divulge information to their children if they do not wish to. Often, however, clients who have been keeping everything private soon will see the value in disclosure, and will open up either during or shortly after the meeting.

Keep up the communication

Even if you have had the most successful family meeting possible, your job isn’t finished. Aside from any specific financial matters to which you become committed as a result of the conversations, you have to keep up the communication with the attendees. I suggest you include the children, executors, trustees and other relationships in your ongoing marketing messages. Add these people to your newsletter list, invite them to educational seminars and workshops and to any client appreciation events. This flow of communication will reinforce that you are a trusted professional and you will be there to make sure the process goes smoothly when the inevitable happens.

Hopefully, by that time, the heirs will be full-fledged clients and the chances of assets walking away from your practice will be drastically diminished.

Helping your clients to communicate their wishes to those who are going to carry out those wishes is a great service. Done right, I am confident you’ll be rewarded.

George Hartman is managing partner with Elite Advisors Canada Inc. in Toronto. Send questions and comments to ghartman@eliteadvisors.ca.

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