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Why Advisers Should Communicate with Clients’ Adult Children

From family meetings to providing resources, advisers need a strategy for helping their clients’ adult children.

According to research by asset management research firm Cerulli Associates, only about 13% of adult children of affluent aging clients chose to work with their parent’s financial adviser. About 88% of those who chose not to work with their parent’s adviser never even considered doing so.

This is during the greatest intergenerational transfer of wealth in history. As an adviser it's important for you to connect with clients’ adult children if you’d like to work with them and retain their assets.

Family meetings

Many financial advisers who are successful at retaining the assets of their client’s children, and those of a client’s widowed spouse if applicable, use family meetings as a way to build their connection to the client’s family.

These meetings might discuss shared family financial goals, they can be a good way for the family matriarch and patriarch to communicate their plans to transfer their wealth to the next generation. This will generally be the result of the planning work you’ve already done with your clients. Communicating with and getting to know your client’s adult children through these types of sessions can build trust and rapport with them.

Depending upon their situation and their age, you might even end up working with these adult children long before their parents pass away.

Adapt Your Practice

While your older clients typically fit the mold of wanting to do in-person meetings with you throughout the year, the next generation often does things a bit differently. Depending upon their age, many of your clients’ adult children are accustomed to using technology in most facets of their life. They will expect their financial adviser to communicate with them via technology in many cases.

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For financial advisory practices that plan to continue on into the future servicing this next generation of clients, embracing technology as a client communication tool is important. To the extent that you communicate with your client’s adult children prior to their deciding whether or not to become clients, incorporating technology into these communications will help distinguish you as an adviser who is easy to work with.

Adult Children Are not Their Parents

In connecting with your client’s adult children, it's important to realize that their adult children are distinct individuals with their own ideas on things, including their wealth management issues.

In communicating with your clients’ adult children, try to learn about what’s important to them, what their priorities are. Many of these might be similar to their parents but invariably they will have their own ideas about what’s important to them in life and in their finances.

This is probably true of each succeeding generation. In cultivating this group, it's important to treat them as the distinct, independent individuals that they are. Treating them as individuals rather than as the children of your clients shows respect and that you value them and their opinions. While this is no guarantee of landing them as clients, taking this approach in all dealings with them is certainly a step in the right direction.

Position Yourself as a Resource

When interacting with a client’s adult children it’s a good idea to position yourself as a resource. Don’t start out with a sales pitch to try to retain the assets they will eventually inherit. Make yourself available to them to answer their financial questions at all stages of their lives. This might start when they get their first job and don’t know how to invest their 401(k). It might continue as they switch jobs and wonder what to do with their old 401(k), or perhaps when they get married and have children. In the latter case, they may have questions about college savings vehicles such as 529 plans.

If they see you as part of the family and as someone who is helpful and welcomes their questions, you will be the logical choice for advice when they inherit their parent’s assets.

Financial advisers who wish to retain the assets of their clients after they pass them on to their adult children need to build a strategy to connect with these prospective clients long before they inherit this money. Cerulli Associates pegs this wealth transfer at $68 billion over the next 25 years. If your firm wants its share, the time to develop a strategy to win over this next generation is now.