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Estate Planning, Financial Planning, Succession Planning

Intergenerational relationships needed

intergenerational advice relationships

Intergenerational client relationships, instead of a focus on mature age clients, is critical for the future success of advisory practices.

The wealth management director of a large accounting firm has stressed the importance for advisers to establish intergenerational advice relationships with the children of their mature-aged clients to ensure their book of business will not be marginalised in the short term.

Deloitte investment and wealth director Mark Ryan told delegates at last week’s virtual SMSF Association National Conference 2021: “There is still this bias to have a really tight relationship with the father of the organisation, and then when he passes away, it’s quickly pivoting to the mother of the organisation, but what about the adult children of the family?

“It’s fine to say it’s a macro trend, but what are you doing about it? If it’s not a policy, if you’re not reaching out to them, you’re not getting to know them. What position does that leave your practice in in five, six [or] seven years’ time when your key clients have passed away?”

Ryan revealed a recent conversation he had with a financial adviser demonstrated the problem is real.

“I [asked:] ‘Is it a policy for you to meet the children of your clients?’ He said: ‘No, it’s not a policy.’ [Then] I [asked:] ‘If you were going to assess how many children of your clients you’ve met, would it be none, a handful or lots?’ He said: ‘A handful at best.’”

According to Ryan, advisers ignoring the children of their clients need to recognise the amount of money held by individuals in their pre-retirement years and what this amount of accumulated wealth could mean for their practices.

“If we’ve got practices that aren’t having these family conversations, does [this] money stick [with your business]?” he said.

Acknowledgement of this macro trend should act as a call to action for advisers to address this situation to ensure the commercial viability of their practices.

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