Moriah Diedrich is a demand generation specialist at NaviPlan, the financial planning technology provider of choice for more than 140,000 financial professionals.
It comes as no surprise that the two topics high-net-worth (HNW) clients are discussing most with their advisors are tax planning and investment performance or strategies. However, other important subjects such as estate planning and strategic philanthropy are not being brought up as frequently as you would think. With less than half of HNWIs having substantial conversations about aligning their wealth with important goals and values, there is a real need for advisors to broaden the wealth planning dialogue they are having with clients.
According to the 2018 U.S. Trust Insights on Wealth and Worth study, here are the top five topics that HNW clients want to discuss more with their financial advisors.
1: Estate planning
Although 48 percent of clients are currently discussing estate planning with their advisors, this is still the top subject that HNW clients expressed a need for more information and guidance on. The estate planning process can be difficult to navigate with varying client situations, but the right financial planning software helps advisors make accurate assumptions and apply various strategies to identify the best approach in handling a client’s estate.
2: Trust options and implications
Trusts can be an important aspect of crafting estate plans in order to reduce estate taxes while helping clients to still remain in control of their wealth and protect their legacies. Picking a trust that is the right fit for their situation can be difficult, especially when only 35 percent are currently having these discussions with their advisors.
3: Strategic philanthropy
In 2017, a substantial 90 percent of HNW households made charitable donations, yet only 16 percent discussed their strategic philanthropy with an advisor. By incorporating the topic as part of the larger tax strategy discussion and creating an advanced giving strategy, advisors can demonstrate how complex assets can be donated in a tax-favorable way. Further, the right giving strategy helps clients give more than they thought was possible and is a great way to build trust in the client-advisor relationship.
4/5: Facilitating discussions about the use of family wealth and teaching heirs financial skills
The final two most important concerns of HNW clients involve preparing the next generation to responsibly manage their family’s wealth. An astonishing 70 percent of families lose their wealth by the second generation and 90 percent by the third. Educating your clients’ children on financial planning can help establish you as the family’s go-to, trusted advisor, making it easier to retain their business as heirs receive their inheritance.
Like any client working with an advisor, HNWIs are looking for assurance that they are doing the right things to achieve their financial goals. Advisors that take the time to address these topics are able to better understand a client’s needs and provide a truly holistic financial planning experience, resulting in a higher value proposition and success for years to come.
For more articles on improving your financial planning or wealth management practice, follow us on Twitter and LinkedIn.