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Heed Your Own Advice: Plan

Research released yesterday from the Financial Planning Association and Janus Henderson titled, “The Succession Challenge 2018: Why Financial Advisers Are Failing to Plan for the Inevitable,” showed that financial advisers aren’t doing all the things they’re telling their clients to do when it comes to succession planning.

The research found that the number of financial advisers who reported having a formal succession plan in place has actually decreased from 28 percent in 2015 to 27 percent in 2017.

The research brought to light some reasons behind why advisers aren’t planning properly and also some interesting findings on how advisers in big firms differ in their succession planning from advisers in smaller firms.

Why The Lack of Planning?

There are several reasons why advisers are reluctant to plan for the next stage, the research found. Here are the top areas that presented the biggest challenges to succession planning:

Strategic. Fifty-one percent of planners said the biggest challenge was finding the appropriate successor or partner.

Michael Futterman, assistant vice president of Janus Henderson Labs professional development team, said this was a surprising aspect of the research findings—that advisers were not focusing on valuation but on finding the right successor.

“While valuation remains an important aspect of succession planning, it’s a math equation,” Futterman said. “The more challenging question of who [is the right successor] is one that cannot be answered with math.”

Personal. Twenty-two percent of advisers said personal concerns were an issue. This could be because it’s not easy facing retirement. Maybe planners are scared or don’t know what they want to do in retirement. Maybe they’re concerned about their health, or that they’ll be antsy and restless.

“While finding a successor is clearly an important challenge, the data suggests that personal challenges play a big role for advisers when thinking about the future,” the research report said.

Structural. Fifteen percent of advisers said they weren’t planning for business succession because of reasons like structuring the business to maximize value, the research found.

Mechanical. Twelve percent of advisers said the mechanics of developing and executing a succession plan was their biggest challenge.

Bigger Firms Plan Better than Smaller Firms

The research found that 60 percent of advisers in firms that have $500 million or more in assets under management had a formal succession plan in place.

“I think that these advisers have grown because they see their business as a business—and they treat it accordingly—or at least in greater percentages than those that might not have been successful, Futterman said. “They are interested in leaving a legacy and providing support for clients.”

However, only 13 percent of advisers in firms with less than $50 million in assets under management has a formal succession plan in place.

“The smaller adviser is likely struggling and does not see a horizon where succession planning is important or imminent,” Futterman said.

Just Do It

It all boils down to this: you simply need to start planning, no matter what type of challenge you’re facing and no matter whether you work at a large or small firm.

“Plan early, often and with options in mind should your circumstances change,” Futterman said. “If you don’t take control then someone else or something else will.”

Editor’s note: Download the Janus Henderson Investors and FPA research here. If you’re looking for additional resources to help you with succession planning? Click here for more from Janus Henderson Investors. Also, Michael Futterman will present an FPA webinar titled “The Succession Challenge: Why Advisers are Failing to Plan for the Inevitable” at 2 p.m., EST on May 30. Register for that webinar here. Stay tuned to FPA’s Research and Practice Institute for two white papers diving deeper into the research findings in June and July.

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Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org. Follow her on Twitter at @AnaT_Edits.


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The Essential Ingredient to Success: The Team Communication Plan

In our Know Service book, we show how to create a client communication plan that leads to loyal clients. Clients expect constant communication from their financial professional to make sure that they are on track with meeting their goals and that you are doing your job. Teams are no different. Whether your team is made up of two or ten individuals, a team communication plan engages staff and is vital to the success of your business. As the leader of the business, you must articulate the vision for the enterprise, keep team members focused on the right results and solicit their feedback and suggestions for improvement.

Team Communication Plan: The Why?

Consistent, ongoing and intentional team communication provides many benefits, including the following:

  • It ensures that all team members are on the same page and understand the current state of the business in regard to its goals.
  • It provides an opportunity for the professionals and staff to share the client relationship responsibilities.
  • It minimizes the frustrations and disconnected feelings that individuals may have, and it strengthens the cohesiveness of the team.
  • It gives all team members the knowledge and comfort level to exchange ideas, challenges and solutions.
  • It ensures that you build regular review or evaluation time into your team’s business plan.
  • It helps your business plan become an action-based document that includes everyone’s participation rather than being a dust-gatherer.
  • It helps uncover challenges before they become major problems that can weigh the business down.
  • It increases everyone’s accountability and reminds you of how important it is to reward yourselves and celebrate successes when you reach certain benchmarks.
  • It helps you know when the team needs to make changes.
  • It helps you stick to a disciplined approach, but allows for flexibility and adaptations when needed.

When team communication begins to fall apart, many challenges ensue. Efficiencies decrease and errors increase, which can lead to a stressful environment where team members are disengaged.

Team communication is the foundation for the success of your overall goals. So, ask yourself, do you have and consistently execute a team communication plan? Below we provide some ideas to help you personalize a team communication plan for your business.

Team Communication Plan: The Basics

Depending on the size of your team, the style of your business and the length of time that you have worked together, each team communication plan will vary. There is no single one-size-fits-all solution; you need to create a plan that is customized to your practice and needs. Although each team communication plan will be different, be sure to include discussion around the following critical elements:

  • In-person and electronic team communication
  • Frequency
  • Location
  • Attendance and participation
  • Purpose
  • Agenda
  • Priority system
  • Action Plan and follow-up process

In-person communication. As you develop your team’s communication plan, you should consider both in-person communications as well as electronic communication. In-person team meetings should begin with a purpose—what are you trying to accomplish? Obviously, the purpose, or focus, of the meeting is different based on the type of meeting. Monthly and quarterly meetings are often more strategic in nature and project-driven, whereas daily huddles and weekly meetings are more tactical in nature and task-driven. Additionally, if you are on a larger team with several professionals/planners and many support members, you may want to establish additional meetings based on function (sales meeting, administrative meeting, investment management meeting or marketing meeting). To ensure successful and productive communication, make sure that your in-person gatherings are laser-focused so you don’t end up having meetings just for the sake of having meetings and wasting everyone’s precious time. Also, consistency is vital to effective team meetings. For example, if a weekly team meeting is established for Tuesdays from 11:00 a.m. to noon, then, unless it is an absolute emergency, no team member should schedule anything during that time frame.

Communication involves talking, listening, tone and body language (or non-verbals). For communication to be effective, all elements must be in alignment. Every team member must have a voice to share thoughts and ideas. Every team member must know when to be quiet and just listen. The tone in the delivery is critical to the right message being conveyed. The words you use will become irrelevant if the tone that you utilize is inappropriate. Remember that every message must be delivered with respect for each other and the team as a whole. Non-verbals are also critical to effective communication. Eye contact, crossed arms, facial expressions, etc., can all influence whether the communication is effective or not. The bottom line is, what you say and how you say it in words, tone and body language are vital to the RIGHT message being delivered.

Ownership and agendas. Each meeting should be owned by an individual team member. This helps maintain consistency and organization. Similar to client meetings, we recommend that each team meeting be agenda-driven. This helps ensure that nothing falls through the cracks and that all team members stay knowledgeable about specific project updates. Although one member of the team should have ownership, obviously all team members can provide agenda items. Some items will be constant and remain on the agenda, while others will come and go depending on what the firm is working on (such as special projects or implementing new initiatives).

february (2).pngUnderstanding priorities. One of the most frequent communication challenges that we see in our consulting is the lack of understanding of priorities within the practice. So much can change on any given day that support members end up with 15 items on their desk that they believe are all critical based on the adviser’s communication. They then become frustrated because they know that there is little chance of accomplishing all 15 in any given day. We recommend coming up with a simple system to ensure that all team members know what the real priorities are at all times. For example, using three simple words with defined and understood meanings can help clarify priority status. You might choose words such as urgent, important and low to represent the priority, or colors such as red, orange and green to help communicate to team members the importance of tasks or projects. Often, it helps to include a specific date or time with these words. For example: Low: Tuesday, January 26th by noon.

Electronic communications. With the increasing complexity of our industry, the varied responsibilities that we have each day in our rapidly changing world, and the need to conduct client and prospect meetings out of the office, it’s critical to include how you and your team members will communicate when you are not together in the office. Electronic communication has become a necessary element for all. For most, using a networked contact management system and calendar for all team members must be a foundational element of your business. Having multiple calendars and different systems to capture notes on tasks and strategies will waste time and create confusion among team members. Once you have decided on your medium for electronic communication, implementation should happen daily.

Each member of the team should update the contact management system as activities are completed or new ones are assigned. All team members should be expected to put daily prospect and client updates in the contact management system, and new tasks should be assigned as appropriate with priority requests as specified above. If this doesn’t happen, then you must find a way to make it happen. Some teams utilize dictation services or even hire someone with the sole responsibility of inputting client notes and tasks in their contact management system. Knowledge is only valuable if it is shared with others and subsequently used, so please be sure to seek out a solution for this area of your practice.

Engaged team members need to know how they influence the success of the business..pngPeople are the most important element of your business, and a lack of good communication is the number one reason that problems occur in your relationships. A consistent team communication plan can make a difference to both the revenue and efficiency areas of your practice; the plan can even mean the difference between team member retention and departure. It is so easy to get caught up in daily activities and distractions and become reactive to your day, thereby allowing outside elements to take control. Creating and consistently executing a team communication plan ensures that all members of the team understand their value to the business and how they impact its success. Engaged team members need to know how they influence the success of the business. The ideas provided in this article are intended to help you get started, but obviously, you need to design your own plan based on your team structure and your team goals. Don’t ignore this essential ingredient to success.

Editor’s note: See more from Sarah Dale and Krista Sheets on team development in the new FPA Coaches Corner, a resource for FPA members that serves as a hub for content, tools and resources from recognized business coaches in the profession to help members realize their vision of success.  

 

Krista_Sarah_headshot

Sarah E. Dale and Krista S. Sheets are partners at Performance Insights (performanceinsights.com), where they focus on helping financial professionals increase results through wiser practice management and people decisions.


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A Will Alone Won’t Cut It

Only four in 10 Americans have a will, according to figures from AARP. And oftentimes people who have a will call their estate planning efforts good enough.

In addition to having to review their estate planning documents in light of the Tax Cuts and Jobs Act, clients must have other documents and plans in place to call their estate planning efforts complete.

CNBC reported in the article, “12 Financial Planning Documents to Handle Health, End-of-Life Care,” that your clients might need more. Clients should have the following documents in place and updated:

Healthcare proxy. Have your clients pick a person who can make medical decisions for them and then a back-up person in case their primary choice is unable to do it for some reason. Encourage clients to choose people who have the same ideas about quality of life, CNBC reported.

Living will. Ensure clients have a document that establishes what type of care they’d want in case of incapacitation, and make sure they put it in an easy-to-access spot for their family members. Should they get sick and they have their living will in a safe-deposit box, it won’t be easily accessible for family members in that time of stress.

Durable power of attorney. Have clients pick somebody who can pay bills and take care of other financial matters in case of incapacitation. The CNBC article reminds us that banks might have separate forms that need to be updated regularly.

Diminishing capacity letters. Bringing the topic of diminished capacity up to clients now, before their capacity starts to diminish, and creating a plan of action can help curb any confusion about what to do in the future. Ask clients to sign documentation of the plan so you have a specific course of action on who to contact and work with should this happen to them.

Pet trusts and letter of final wishes. Perhaps your client is the last living spouse and the dog or cat would be left all alone upon his or her death. Your client can establish a pet trust to provide for his or her pet’s needs and a letter of final wishes that determines who gets custody of the pet and the pet trust, Forbes reported in an article, “Estate Planning: Include Your Pets.”

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Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org. Follow her on Twitter at @AnaT_Edits.


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Outbound Versus Inbound Marketing: Which Strategy Is Best for Financial Advisers?

There’s a battle raging in the corner of your business labeled “marketing.” It’s between two completely different methods for spreading the word about your firm and getting prospective clients in the door: outbound marketing versus inbound marketing.

Which strategy should win out? Which is going to win you the best results from your marketing efforts?

As someone who makes a living helping financial advisers leverage content as part of inbound marketing strategies, I’m admittedly biased. I believe that content should serve as the foundation for your marketing strategy.

But that doesn’t mean outbound marketing doesn’t have a role to play—and as biased as I am, I’m also professional enough to know there are some situations where outbound tactics will win.

Let’s take a closer look at this debate and help you determine which methodology is appropriate for your firm.

But First, The Difference Between Outbound Versus Inbound Marketing

You can’t make an informed decision about which strategy will win in your firm’s battle for the best marketing approach if you don’t truly understand each side of the fight and the differences between the two. Outbound marketing is traditional, old school stuff. It’s where marketing and advertising started, and it’s what a lot of businesses still rely on today. Outbound is:

  • Cold calling (or cold emailing or messaging)
  • Direct mail
  • Paid advertisements (online or off) or paid publicity
  • Trade shows/seminars
  • Interrupting someone to get their attention
  • Incurring a tangible, direct cost to acquiring a lead or client
  • Creating an advertising system that’s dependent on budget

Now let’s compare that with inbound marketing:

  • Content creation (written, visual or audio)
  • SEO
  • Social media
  • Public relations
  • Supporting events
  • Community involvement
  • Public speaking
  • Word of mouth

Inbound marketing earns someone’s attention. It gets their permission to communicate with leads and has low monetary cost of acquiring clients. It’s more dependent on messaging and connection than ad spends, and does not always cost money to do.

The Advantage Goes to Inbound If You’re Short on Budget

The internet has made inbound marketing possible—and massively popular and often profitable—because the cost of distribution of the tactics in this marketing methodology is often free. Think back to that list of outbound tactics. With each one, there’s a cost associated and therefore a limit to how widely you can spread your message. There are only so many stamps you can buy so you can send out your direct mail because your budget is only so big, right?

But with inbound marketing, most of the time, you get free supplies and free distribution channels. It’s popular not because some millennial said, “Hey man, blogging is cool,” or “All the kids are on social media these days,” but because it’s an incredible opportunity for unlimited reach without spending a dime. It’s just a smart business decision to invest in inbound marketing, which of course, content marketing is a part of.

You get a lot more bang for your buck and you also have what essentially amounts to unlimited upside. Your reach is virtually limitless because you’re dealing with digital space.

That being said, you must understand that these marketing methodologies could have a place in the overall marketing strategy for your firm if you want to be a successful marketer. There’s nothing wrong with either type of marketing. Both work.
They’re both very different, but that doesn’t mean there’s a “right” and a “wrong” here. It depends on your business, your goals, strengths and services or offers.

Use Both These Marketing Methodologies, But in the Right Order

I think the “outbound versus inbound marketing” debate is, ultimately, the wrong one to have. A far better question to ask is, “in which order should I layer on my marketing tactics?”

Start with inbound. Add on the direct mail or social media ads or whatever kind of cold outreach and paid advertising you want to do after you build a solid, organic ecosystem that houses a hyper-engaged audience of people who showed up to hear from you because they’d miss your message if it was gone.

Starting with content helps you build trust, relationships, and connections. But why? Why is this the case that we get these outcomes, and why specifically does content deliver these results where outbound marketing may just not do the trick?

Because 50 percent of people under 40 don’t trust financial advisers; 65 percent of investors distrust the financial advice industry as a whole; and 66 percent of the children of clients will fire their parents’ adviser when they inherit their assets.

I’m sure you’ve heard some of these stats before, and they’re daunting numbers to face. To succeed in the modern world, you have to change the way you communicate. You have to find new ways to attract clients.
Traditionally, most financial planning firms get stuck asking for referrals as the only way of building out a prospect pipeline. That’s really limiting; your ability to generate prospects lacks diversity this way.

And putting outbound or direct marketing tactics first tend to breed even more distrust than is already there. Neither buying the attention of potential clients (through ads) or interrupting and demanding attention (through cold calls or messages) builds authentic connections that allow prospects to feel like they know you (let alone like you).

Think about it: if someone’s first impression of you is as someone trying to sell something (as an ad implies), is the power of your later communication going to be strong enough to convince them you’re there for the relationship, not just to make a sale off their business and trust in you?

Which Would You Rather Do: Create a Space Where People Can Like and Trust You, or Just Keep Selling?

That’s where content marketing makes a difference because you earn your prospective client’s attention. You create, publish, distribute and promote content to attract the right people with the right message and the right time.

Content marketing creates a space where people want to come to you and work with your firm because they trust and like you.

If you sell a product or focus on transactions, you can likely succeed without high-quality content as part of your marketing strategy. You can get away with just scraping information from site visitors using cookies and ad pixels, then use retargeting ads to interrupt a separate web experience those people were having at a later date.

I’m sure this has happened to you—where you’ve visited a site and then that site’s ads follow you around everywhere. Is it effective? Sure. I know it is, because there’s more than one thing I’ve bought after seeing countless ads for it. But that was with a thing, not with a relationship.

If you focus on relationships rather than transactions, you should really consider how you can develop a connection with those site visitors before you make your hard sell. Content allows you to establish yourself as a trusted partner, communicate why you versus the thousands of other financial advisers out there and build a relationship before you ask for anything in return.

You don’t need to sell anyone if you create useful, helpful content. The right content can expand your reach, establish your authority, increase your influence, attract prospects and leads and, most importantly, build trust between you and the people you want to serve.

If I had to declare a winner in the outbound versus inbound marketing debate, I might call it a draw—as long as inbound marketing gets your attention first, and you look to build on it with outbound tactics once you’ve established trust with the people you want to work with.

KaliHawlk
 Kali Hawlk is the founder of Creative Advisor Marketing, an inbound marketing firm that helps financial advisers grow their businesses by creating compelling content to attract prospects and convert leads. She started CAM to give financial pros the right tools to build trust and connections with their audiences, and loves helping advisers find authentic ways to communicate in a way that resonates with the right people.


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Connecting with Clients Who Aren’t Tech Savvy

Many of us tend to stereotype clients of a certain age as “too old” to be tech savvy. After all, the average age in terms of tech savviness gets younger every day. But what if you take a different perspective? Perhaps clients are never too old. Indeed, maybe they would even welcome the opportunity to step up their use of technology!

Let’s start with this scenario: You want your clients to be knowledgeable and comfortable using technology for a review meeting. That way, if they relocate to a warmer climate or are no longer physically able to come to the office, for example, you can still stay connected. Plus, you may believe (as some planners do) that technology-based review meetings are not only more concise but also higher quality. So, what does it take to prepare clients who may not seem tech savvy for a technology-based review meeting?

Beta Best Practices

A good place to start is with a beta approach. Here, there are a few best practices to keep in mind. First, brainstorm a list of two to five clients who you think would be good candidates for a beta test. Reach out to them, explaining to each one the value of conducting a remote review meeting using technology. Then, simply ask them if they would like to participate. If no, end of story. If yes, it’s time to get started.

For this example, we’ll use the iPad as our technology of choice, although there are certainly other options that could work. You’ll need to set up your iPads using the appropriate links so they provide a secure connection. Remember, less is more. The goal is to make it easy for clients by having only the essentials available on the iPad.

Once the iPads have everything they need for clients to connect to a meeting, send them to beta users for the sole purpose of the review meeting. To help familiarize clients with how to use it, include easy-to-understand instructions either with the iPad or directly on it. You might also schedule a phone call to provide a short training session. Now, it’s time to put it to the test.

Try the iPads for one meeting shortly after the training—maybe even the next day. Ask for feedback! If your clients like it, plan on using the iPad for the next review meeting. If not? Simply have them return the iPads to you.

Hidden Benefits and Risks

Of course, there are some clients who don’t even own a computer. You might find that these individuals are the ones who may ask you to talk with their tech-savvy kids. That’s a good thing—and a great opportunity. The kids may see you as taking a novel approach to supporting their parents. On the other hand, what if this strategy is so wildly successful that clients start contacting you 10 times a day? As mentioned above, be sure to establish that the iPad is for review meetings only. Any communication in between meetings can be handled the traditional way—a phone call.

Finally, what if your clients talk to others about how they have reviews with their planner via iPad and from the comfort of their own homes? Positive word of mouth is always a good thing. Plus, innovation presents your firm as young and vital.

Technology Supports Human Connection

Individuals born with technology in hand will be more sophisticated than those who adopt it in their 40s. But millennials are actually the ones who have the most to gain from ideas like this. Who knows where the concept of providing an iPad could lead? What would it mean for clients who adopt this idea to be reminded of you with a beautiful photo, a joke of the day or an inspirational quote? These simple reminders can support the human connection if the foundation is properly laid—in this case—by using an iPad as an enhancement to human relationships.

Now, I know this particular approach won’t be for everyone. If not, what novel idea can you try that can help you stay connected to—and show how much you care about—your clients?

Joni Youngwirth_2014 for web

Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network in Waltham, Mass.


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It’s Not Just About Salary: Purposeful Staffing

I routinely get calls or questions from advisers about compensation for a staff position or junior adviser. Whether it involves hiring/retaining a junior person, or a staff member trying to make a case to their firm about how underpaid they are, the conversation is less about salaries (although it does come up) and more about incentive or variable compensation and bonus. Instead of providing a number or formula, I’ve been asking what would it take that person to leave your firm and why are you doing things? If you know what kind of firm you’re running, and what your goals are, you can be purposeful with compensation.

What Behavior Do You Want?

Over the years, I have lived by a simple rule when it comes to compensation: compensation, especially with variable comp, should be used to drive better behavior. More importantly, advisers shouldn’t have to stick with the same variable comp structure every year as priorities and goals may change. I ask the adviser to think about the goals of their firm, more importantly the leading indicators of success and tie the metrics around those indicators.

As I said, the conversations are changing lately—they are becoming broader. Today, we start with a conversation about work environment. We answer and discuss:

  • Is there a clear vision and purpose for the firm (Do you know where you are headed)?
  • Does the employee have/want the opportunity to grow and is the path laid out for them?
  • Is there a sense that the employee is fulfilled?
  • Is the employee valued?
  • Is compensation really the issue you are trying to solve for?

In my mind, staff more often leaves a business for reasons other than compensation. The biggest reason is always around the vison of the firm and where they fit.

Purposeful Staff

In our most recent paper, “The Purposeful Advisory Firm,” my co-author Raef Lee and I discussed the concept of value engineering for advisory firms. The idea was that an advisory firm has a few levers they can pull that can determine the firm’s direction. Moving a lever in the right direction can propel the firm toward successful enterprise or to a lifestyle firm. I think the people (staff) lever is the most important.

How you use talent can be the key to your success, so it is critically important to understand, communicate and plan for the direction of your firm before you discuss variable compensation with the staff. How can you decide on a number if you don’t know what you are paying for or the direction that the compensation will take your firm?

Lifestyle Versus Enterprise: Questions for You

Before you get into the dollars and cents of a compensation plan, I think it is important to ask questions that can help move that value lever:

  1. Do you aspire to take your firm to the next level? (In addition, can you define what that next level looks like?)
  2. Do you have the appetite for adding (and managing) more employees?
  3. Do you have it in you to fire yourself as adviser and hire yourself as CEO?

If you answer yes to all three of these questions, you are heading down that enterprise path. You will be busy with defining roles, job descriptions and creating a path for all your team members to grow within your firm. Yes means looking at a team approach to the client service model and possibly a chief operating officer hire. The enterprise variable compensation will look at the big picture of the firm and how you are building it for the future.

If you answer no, then the lifestyle approach may be calling you. And figuring out that variable compensation is going to be even more important. You should create a plan that reinforces longevity, continuity and service. The lifestyle firm cannot afford huge turnover that will force the adviser back in the day-to-day operations of the practice. Morale and culture are very important to retain existing clients and strengthen the brand of the no-doubt personality driven firm.

Consequences

Not having a purposeful compensation plan in place leads to employee retention issues. A purposeful plan leads to maximizing the hire for the future direction of your firm. I am often accused of sounding like an attorney (or an economist). When someone asks me about compensation, instead of a direct answer, I now say, “It depends on you.” What kind of firm do you want to be?

Editor’s Note: Join SEI and FPA for a webinar titled, “The Renaissance in Charitable Trust Planning,” at 2 p.m., Eastern, April 18. Register for the webinar here. Also, a version of this blog post first appeared on SEI’s practice management blog, Practically Speaking.

John Anderson

John Anderson is the managing director of Practice Management Solutions for the SEI Advisor Network. He is responsible for all programs focused on helping financial advisers grow their businesses, create efficiencies in their operations and differentiate their practices. He is also the author of SEI’s practice management blog, Practically Speaking.

 


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In Estate Planning, Encourage Clients to Be Open With Adult Children

It was the morning I was to return to Denver after a weekend trip to my small Southern Colorado hometown. My mom and I were having coffee when she said, “Anita, we have to discuss some things.” She got up from the table and went over to a filing cabinet and pulled out a manila folder full of papers.

I realized what the papers were as soon as she’d sat back down. Apparently, she’d devoured the book I’d given her called The Other Talk A Guide to Talking to Your Adult Children About the Rest of Your Life.

My mom is a miracle worker with money. And as she laid out each piece of paper and explained what it was, I realized she’s managed to conduct another miracle—planning the entirety of her and my dad’s estate planning without having us do or pay for it. She’s planned out every detail of her funeral down to what seems like a party complete with a playlist. She’s written instructions as to what we are NOT to do (none of that darn crying, no obituary in the paper, etc.) and she’s even paid for it all already.

Of course, I’ll have to disobey her instructions when that time comes. I couldn’t even hold in my tears as she was explaining what was what because the thought of a world without my queen, my hero, my best friend is unbearable. But she has a way of discussing death as though it will be her last business transaction—one that she’s already put in the work for—and one that I should definitely not live in denial about.

“This is where everything is so you know when the time comes,” she explained as she put the folder neatly back in its drawer.

In editing this month’s Journal of Financial Planning—which is all about estate planning—I got to thinking about this talk with my mom and how it would be helpful if all parents would be this transparent with their kids.

So, I did some research and compiled a list of what you could do to help your clients be as open and honest with their kids as my mom was with me.

Encourage them to have the family talk. The talk I reference above wasn’t the first time my mom has sat me down to discuss this topic. I am the youngest of four children, and she’s sat all four of us down in the same manner to discuss her and my dad’s end-of-life documents and planning. On numerous occasions, she has brought the four of us together to talk about the properties and insurance policies and what will belong to whom and given us each the relevant documents.

Maybe your clients aren’t as open with their kids, but they can still sit down with their children to discuss their wishes and their end-of-life plan so that their kids can get on board. They can also discuss the financial and medical power of attorney appointment at this meeting.

Encourage them to be open with their kids about their decisions. Our mom has told us the rationale behind her estate planning decisions so we understand why certain assets will be given to certain siblings. We are all in agreement with these choices. My mom’s openness and honesty has made it easy for us to accept and honor her decisions. Plus, since she’s incredibly brilliant, her reasons for making each decision are sound.

Encourage clients to make a binder for each child. I got this idea from Bob Mauterstock at an FPA Annual Conference session he had in Boston. He encouraged the attendees to have their clients put together binders for each of their adult children so they can have all the relevant documents they need. My mom absolutely loved this idea and has also made binders for each one of us that contains all the documents relevant to whatever assets she has plans to leave us.

The emotional aspect of estate planning isn’t easy, but knowing my mom has done all of this and has kept us in the loop will make this incredibly difficult transition—both emotionally and financially—a little less intense.

Ana Headshot

Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org. Follow her on Twitter at @AnaT_Edits.