Makanzie assists the sales team to develop and expand in the mid-market space. She builds relationships with contacts by sharing the value Advicent brings to partnerships within the financial industry.
When you think about what generates high profits as a financial advisor, my guess is your first thought is not a 529 plan. What if we looked at it from a different perspective? It is safe to say that an advisor works with their clients for extended periods of time because it takes a while to build trust and allow someone else to manage your money.
Once that trust is established, then a client will be more likely to refer that advisor to a friend and the cycle goes on. However, what happens when those clients and referrals no longer need the services provided by the financial advisor? All of that time spent building trusting relationships has gone out the window, and the advisor is left to essentially start over – unless they utilize the time spent with their clients to build equally meaningful relationships with the children of their clients.
The wealth transfer is coming
“Generational wealth transfer” is a phrase that has held a dark cloud over the heads of financial advisors for a few years now. The transfer from Baby Boomers to Generation X is expected to hold a lump sum of over $30 trillion in assets. To an advisor who has yet to build a significant relationship with the next generation, it may seem like dark days are ahead.
What if I told you there are a few ways to build those relationships with the next generation, without being an expert on the new times? I would talk about two strategies in particular: 529-savings plans and web-based client portals.
The 529 plan
Let’s start with the 529 plan. The tax-advantage savings plan was created to drive an increase in saving funds for future college expenses. Traditionally, this plan is implemented before the child has entered college. Suggesting and creating these accounts early will allow for more time to create a relationship with future college student and potentially lower annual contributions to the plan.
By being a part of the child’s life early, an advisor might be able to provide them guidance in which college to attend. Hold education sessions for the children of your clients, with topics such as money management, financial aid and student loans, and basics about the financial industry. By holding these sessions, the advisors then becomes associated with the financial side of the child’s life, ultimately creating meaningful relationships.
Utilizing digital tools in client relationships
The next strategy that will help you build relationships with the next generation is the utilization of a client portal. Being a part of a society that runs off of instant gratification, clients have come to expect this in their financial relationships as well. For an advisor, there may be a generational gap between a current client and their children that technology can help fill.
A child of a client is more than likely going to want to have that financial plan available at their fingertips. By utilizing a client portal in their technology stack, an advisor can essentially be part of the client’s everyday life, keeping them updated with their financial plan and helping them to stay on track with their goals.
By utilizing these two tactics, you can strengthen your relationships not only with your current clients, but with future clients as well. Once that generational wealth transfer is in full effect, you will be happy you were ahead of the game.
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