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Why Your Succession Planning is Important to HNW Clients

By Crucial Clips     July 5, 2018
The following text is a transcript of a portion of a speaker's presentation made at an industry conference or during an interview. This transcript solely represents the view of the individual who spoke, and not the view of Financial Advisor IQ or any other group.
Source: FA-IQ, Mar. 22, 2018 

RITA RAAGAS DE RAMOS, SPECIAL PROJECTS MANAGER, FINANCIAL ADVISOR IQ: Hi. I’m Rita Raagas De Ramos from Financial Advisor IQ. And with me today is Richard Kelton, founder and partner at the Kelton Financial Group, which is part of the Northwestern Mutual Wealth Management Network. Given that your high net worth clients prioritize passing on their wealth to the next generation, I’m assuming that succession planning is very important to them. So how are you addressing this particular need?

RICHARD KELTON, PARNER, THE KELTON FINANCIAL GROUP (NORTHWESTERN MUTUAL): So in our practice, I’ve just brought on both of my sons, Ryan and Sean [Kelton], have joined us. When they first graduated university, they both went out and worked in management programs at a corporation, and then subsequently joined us in the practice.

I think it’s really important, as the age of advisors are getting older, that they make sure that the process that they built with their clients doesn’t end when they end. So I’ve talked to both of the children about how important it is to me that that happens, and that we make sure that that legacy from us to them doesn’t end when I decide to retire.

RITA RAAGAS DE RAMOS: Right. And what are they bringing into the table? Presumably they are from a generation that’s very adept with technology, for example, with social media. Are these tools that are helping?

RICHARD KELTON: They are. So they helped us update our LinkedIn page, our website, stuff about the team so that our clients can be more connected to what they’re doing and what they provide to our clients. They also bring a fresh look on everything. When I brought both of them on, I made sure that they looked over all the systems that were built, and the team, and how we interacted with the clients. Give us feedback. What did they like? What did they think ran smoothly? What did they think could run better? So they brought a fresh look, and it’s been very helpful.

RITA RAAGAS DE RAMOS: When we conduct surveys, succession planning is usually pretty high on the list of the concerns of the investors. So how do you think this setup is helping appease them?

RICHARD KELTON: So I’ve talked to all my clients about why they’ve been brought on, five and 10 years before I thought anything would happen with me going into retirement or deciding to slow down. And I think the advantage is, you get a 30- or 35-year-old doctor with a 50- or 55-year-old’s mentality. So they’ll have a lot of knowledge base provided to them that they wouldn’t normally have five or 10 years in the business.

RITA RAAGAS DE RAMOS: And what has been their response so far, especially from the second or third generations?

RICHARD KELTON: I think the response has been extremely positive. Our clients are very happy with what they get, the service that’s provided. But now they understand that at some point I’ll slow down, and that the legacy will carry on. They’ll get the same message, the same operating system with them. And that the kids will make sure that their plans are coming to fruition.

RITA RAAGAS DE RAMOS: What would you say is the most important determinant to keeping that multi-generational wealth in your practice?

RICHARD KELTON: I think it’s important that clients know that we care, and that we really care about them today, tomorrow, and through the next generation. I think it’s important to get their children, or the next legacy, involved as soon as they can. So as soon as they’ll share their information with their kids, we try to make sure they are involved.

My children have relationships with their children. They take them through the same process that their parents have been through. They meet with them, usually on the phone. They take information from them. They run analyses for them. They help them with their 401(k) choices, what kind of benefits should they do at their employment. So they already have a relationship with them. So as that money passes from the parent generation to the children generation, I think they’ll be well prepared.

RITA RAAGAS DE RAMOS: Thank you.