It's coming: the Great Wealth Transfer, that is. According to Cerulli Associates, an estimated $84 trillion will shift from baby boomers to Generation X and millennials between now and 2045, with 80% of heirs expected to find a new advisor once they inherit — assuming they choose to work with an advisor.
Baby boomers (those born between 1946 and 1964) hold an average of $1.2 million in household net worth, and the Great Wealth Transfer has already been a topic of heavy discussion for more than a decade. But because the oldest baby boomers have only recently turned 75, this transfer may seem far off.
Still, it's important to consider the (literal) million-dollar question now: How can you best plan for your clients' eventual passing without seeing their assets walk out the door?
In addition to the business implications of potentially losing a client, there's a deeper element at play. You've gotten to know your clients on a personal level over the years; you've taken an interest in their families and you likely feel pretty invested in securing and being part of fulfilling their lasting legacy.
If any of this resonates with you, here are three things you should focus on before it's too late:
1. Understand estate planning.
You don't have to be an estate lawyer or have a law degree to show a genuine interest in the client's broader planning — including the children who they've named as representatives in their estate planning to carry out their last wishes. It can make them more likely to view you as a valuable partner in seeing their lasting legacy through.
When you meet with your client, ask if they'd be willing to discuss their estate plan with you. Be sure to ask questions if you think something doesn't make sense ("Can you help me understand why you think your revocable living trust can help save estate taxes?") or if you think there may be a missing piece. ("I see that you have a health care proxy, do you also have a living will?")
For actions that require specific follow-up, you may want to see how you can help your client dot their i's and cross their t's. ("Thanks for sharing about your non-probate assets. Have you prepared and filed the paperwork to set your beneficiaries, or is there a way I can help you get this done?")
Not only can this help you learn a good deal about what a comprehensive estate plan looks like (and common mistakes clients make), but it will also show your client that you're truly invested in what their future plans are and how you can be a part of them — which could pay dividends later.
Bottom line: It pays to understand and be genuinely interested in the bigger picture.
