How Can Financial Advisors Retain Their Clients' Children?
If you knew that 80% of your clients’ children will leave you once the kids received an inheritance then I suspect you'd be concerned. Your book of business would decrease substantially, and you haven’t done anything wrong. So how can you protect yourself from this risk? As a former financial advisor who led an initiative to retain the children of our clients, I’m here to give you some guidance.
First, begin building a relationship with your clients' children.
Take them out to breakfast or lunch, or invite them into the office so you can show them what you do. Being genuine is the first step because the next generation of client will quickly recognize if you’re not. Avoid being salesly. Just be a resource.
Second, be willing to help your clients' children when it comes to the basics of finances.
The children of your clients grew up in an era where they looked at TikTok for financial information and traded stocks on Robinhood. However, they want a real financial professional to talk to and teach them. Trust me here, I’ve had countless conversations with the children of clients who love looking at an official research report.
Third, you can offer free financial advice to your clients' children until they turn 26 years old.
This piece of advice is from an article written by Samantha Russell. She cited a research report from the Spectrem Group which found 20% of clients with at least $25 million want their advisor to begin a relationship with their children. If this solution works with you and your firm, it may be a good idea to try it. Determine how much time you can commit to the children of your existing clients and make it clear.
Fourth, be relatable to your clients' children.
You need to be relatable to your clients’ children. Talk about what’s going on in their world and what they read - are they reading about “meme” stocks or day trading? If so, make it a point to talk about it and add in your perspective. This is an opportunity for you to educate them without them thinking it’s education. If you are fortunate to have younger team members, it can be a good idea to introduce the clients’ children to them. The younger team members can relate more and begin to build a relationship with your clients’ kids.
To wrap this up: spend time with the children of your clients, be interested in what they’re doing and what they want, be a source of knowledge for them to ask questions (financial and non-financial), and genuinely care about their wellbeing. As a bonus to retaining the children of your clients, your clients will be happy that you are taking the time to help their family.
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