The Great Wealth Transfer: How to Retain Next-Gen Assets

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Note: the follow is an article written for BMO's Insights after an interview I did with the firm.

For many Advisors with long-standing high-net-worth clients, the intergenerational shift in wealth is of great concern, specifically retaining the assets of heirs after an inheritance. According to Lloyd Williams, it’s even more pronounced than the preceding wealth transfer from the WWII generation to Baby Boomers, since their value systems and work ethics were more philosophically aligned than those of Baby Boomers and Millennials today. “Millennials are a whole different breed; they’ve stepped outside the bounds of their parents.” So how do Advisors keep family wealth? Lloyd Williams shares his six-step process with Insights.

66% of children fire their parents' Financial Advisor after they receive an inheritance1

1. Protect ALL interests

Your natural inclination is to protect the interests of your “lead” client in an affluent family – typically the parents. However, when it comes to the intergenerational wealth transfer underway (approximately $750 billion in Canada during the next decade alone2), it’s important for Advisors to view the family as client – and learn to protect all interests.While you may be an adept mediator, well versed in navigating conflicts as they arise within a group dynamic, it’s critical to meet with family members individually. By doing so you’ll lay the groundwork for a mutually beneficial relationship by facilitating participation; asking questions; and eliciting their hopes, dreams, needs, and vision for wealth. You’re not there simply to share facts and figures, nor are you there to provide all solutions. Your role is to ensure that all parties feel truly heard. The resulting trust is fundamental to retaining assets, and opens the door to potentially onboarding new money: the hard-earned wealth of heirs who may already be established professionals. 

2. Talk business

When dealing with prospective clients, the first thing to identify is if there’s a business connection between generations. If so, despite any succession complexities, this presents an inherent commonality an Advisor can lever – and by virtue of being in the family business, the children have interacted with those assets to an extent, and perhaps already exert some control over the money.

For all families, early wealth education is a must. Help your lead clients to see the value in articulating how they’ve amassed assets, and in integrating their offspring into the decision-making process. By shortening their learning curve, heirs will have a skillset in place by the time wealth transitions.

3. Create value through open communication

When you do put family members together in the same room, you’ll quickly identify the hotspots to work on. For example, a third of my advisory practice was with family-owned businesses in transition, so I’d see retiring parents grappling with which child should take a lead role, navigating potential interference from extended family, and deciding how to deal with business equity.

In this setting, pay attention to the quality of communication: Is there ongoing dialogue? Does the next generation understand their parents’ wealth plan? Have the parents remained secretive? Do siblings see eye-to-eye? The more closed off the relationship is between generations, the more prone it is to real tension. In fact, far too many parents have not opened up with their kids about the family wealth, leading not so much to ignorance – most children have a pretty good feel for their parents’ net worth – but to distrust.  It’s up to you to break the news that the secret mom and dad are keeping likely isn’t a secret after all.

As an Advisor, facilitating these meetings adds tremendous value; you’ll be a catalyst to positive change – making a difference in the lives of each person at the table. The important thing is that everyone gets a vote. And while it’s realistically a much lengthier process to gain family consensus on stewardship and wealth transition, the return on your investment of time should be the retention of all assets

40% of Canadians have not discussed estate intentions with their heirs3

4. Motivate your clients into immediate action

People are motivated by pursuit of pleasure and avoidance of pain. Use one or both arguments to incite action now and help your clients solidify their legacy. For example, parents may not be eager to integrate children into the planning process, but will become motivated as you help them to focus on the risks of inaction: hard-earned wealth being mismanaged, a business demise, or sibling conflict. The benefits of the process may capture their attention too.  It’s up to you to figure out how to get them up and out of their chair.

Uncomfortable subject matter is par for the course, so on occasion you’ll inevitably find yourself broaching the fear of disaster. An obstacle to planning may be that Mom and Dad are alive and well,but the reality is, nobody’s guaranteed his or her next breath. No one enjoys these conversations, but they will appreciate your ability to help them acknowledge the risks, and be more receptive to taking immediate action.

5. Consider a family office approach

As Advisors become more seasoned, they tend to narrow their scope, establish minimum thresholds, and focus on a particular investment style or niche market. While there’s tremendous upside to being a specialist, you may find your particular approach doesn’t resonate with the next generation.

In my practice, we developed a multi-client family office solution, advocating the power of pooling assets in order to manage money for future generations – creating some real growth-oriented portfolios in the process. We’d then point to our track record, and demonstrate to prospective clients that no one could manage their family’s individual accounts the way we’d manage their collective $10 million – using an endowment model. By the time I retired, we had 26 such family trusts set up. There remains a great opportunity for Advisors, when you consider the sizeable marketplace of $10 million to $50 million family-owned businesses out there. 

6. Help clients avoid pain that goes beyond the grave

You might encounter siblings that initially won’t compromise – or worse, have the means to use legal recourse to dispute estate transfer issues after your original client is gone. To be sure, there are brothers and sisters out there who haven’t spoken for decades after an inheritance battle. That’s a pain beyond the grave that you want to help today’s clients avoid.

Through an inclusive process – and the fundamental act of listening to each individual – you can achieve powerful results for everyone. I remember one client saying to me, “the greatest thing about our transition plan is that it brought our kids together.” It wasn’t the fact that she and her husband were enjoying a comfortable retirement; it was that they felt like a family again. Helping to that extent meant rewards for my team that went far beyond asset retention.

How To Run Your Meetings Like Apple and Google



Meeting can either be a waste of time or a catalyst to productivity. Are your meetings as effective as you would like? If not, Sean Blanda from 99U has written an excellent article outlining how several truly productive companies make the most of each meeting. Learn from Apple, Google, and others.

The following is a short excerpt from the article.

Rapid experimentation with meetings in the past decade by startups and Fortune 500 companies alike has produced a new set of rules to consider. Here are three that seem to be universal:

  • All meetings must have a stated purpose or agenda. Without an agenda, meetings can easily turn into aimless social gatherings rather than productive working sessions.
  • Attendees should walk away with concrete next steps or Action Items. We love Action Items here, but we're not the only ones. From Apple to the Toastmasters, the world's most successful organizations demand that attendees leave meetings with actionable tasks.
  • The meeting should have an end time. Constraints breed creativity. By not placing an endtime, we encourage rambling, off-topic and useless conversation.

Of course, there's no need to stop there. Truly productive companies always continue tweaking to suit their specific culture.

Your meetings can be productive. To read the entire article and hear what Apple and Google do, click here.

Five questions to ask before you buy a book (of business)

I was recently interviewed by Fiona Collie for an article she wrote titled "Five Questions to Ask Before You Buy" for Investment Executive website. The article discussed several important questions to ask first.

One of the biggest hinderances to successful purchases is the incompatibilty of the new advisor with the new clients, because of the personality differences between the two advisors. I encourage my clients to always have the other advisor do a DISC analysis to confirm compatible personalities. Otherwise, the buyer may discover months later that the assets they thought they were purchasing have disappeared. For more information on the DISC analysis see the link here.

Managing Client's Fear

Ever wished you could understand your clients' fears regarding the markets and their investments? The book The Science of Fear helps you understand the root of fear and will prepare you to better manage your own concerns and your clients' fears as the markets volatility makes remaining calm difficult. This is a must read for advisors wanting to protect their practice and clients from the irrational fears that cause bad decisions. Highly recommended.

Checklist Manifesto

Studies now show that checklists actually improve the quality of deliverable service. What was once the tool of pilots and astronauts is now used by surgeons, hospitals, and money managers to improve there execution and delivery of value. The book Checklist Manifesto details the value of using checklists. This is a great summer read. Highly recommended.

Procedural checklists are an important part of every successful practice and I recommend them for all my coaching clients. The following are several links to important checklists you may find of value:

Pipeline Process - checklist for developing a relationship with a prospect in the financial service industry

Operations Manual - checklist procedures for running a financial service practice

RoadMap for Change - weekly task list to accomplish your most important dreams

Improve your practice by reading Checklist Manifesto and create a bullet-proof practice.

Weekly Team Meeting

The team will only buy into a vision they create. If the boss does all the planning, they will have to do all the work. Ask the team to identify the three biggest changes that need to happen to make the team more successful. Say nothing and do not critique their choice.

Then ask them to identify the next action necessary to make each of the three changes a reality and have someone other than the boss be resonsible for completing the action in the next seven days.

You may suggest they block off time on their calendar to accomplish the task. Assign one task for each of the three changes. Then sch the meeting for the next week.

Tell each person assigned a task to come to the meeting prepared to answer two questions. 1. was the task accomplished? yes or no 2. what is the next task that needs to be done to move the project closer to completion.

This should take 5-15 minutes of your weekly meeting. The rest of the meeting can be used for each department or team member to explain what is on their plate for the week.

The purpose of the meeting is to focus the team on the most important tasks and make sure everyone knows what the team workload looks like.