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FAs Too Complacent About Retaining Clients’ Heirs

By Alex Padalka November 3, 2016

An overwhelming majority of financial advisors may be engaged in wishful thinking if they believe they’ll get to manage the assets of their clients’ heirs, according to a new report.

Ninety percent of advisors firmly believe they’ll manage some of the assets their clients pass on to their children, according to a survey of more than 200 financial advisors conducted by the online estate and legacy planning platform Everplans and research and consulting firm Cerulli Associates.

But only 7% of respondents have their clients’ children as established clients themselves, according to the survey, which was carried out in August and September. Meanwhile, half of all advisors think they’ll manage the assets of a client’s grandchildren but 92% don’t know them at all or are only quasi-acquainted.

Even when it comes to their clients’ spouses, advisors are probably feeling too sure of being able to manage their money if a client passed away. While 95% of advisors have some form of relationship with their client’s spouse, just two-thirds of them have the spouse as their client. Nonetheless, 75% of advisors believe the surviving spouse would keep the client’s assets with them after he or she died, the survey found.

The authors of the report suggest advisors should get to know their clients’ families. But many FAs think they’re already doing so: almost 70% of respondents say they ask clients and their spouses to also get their children involved, and 42% try to get future generations involved from the very start of a client relationship. And 38% hold information sessions on wealth management with the children of both current and potential clients, according to the report.