Advisers should look for and address family issues that could derail planning.
Financial advisers who explore family dynamics and look for potential obstacles to intergenerational planning will come out ahead of the competition, according to a communications expert.
Learning about relationships between siblings and other relatives by asking questions and listening carefully to how the client, children and others respond can help uncover and settle contentious issues before they erupt, said Ellen Eichelbaum, a gerontology consultant.
Advisers should be looking for sibling rivalry, evidence that a parent favors a particular child and other disharmony within the family structure, she said. Also, watch for an adult child who may be resentful of being the most depended on for care or which child may be financially motivated to participate in the planning process.
Advisers should speak to older clients without their children, Ms. Eichelbaum said, if they expect to garner honest answers to questions like, “Is it OK for me to share copies of your financial statements with all of your children?”
“You would be the best financial adviser in the world if you ask the right questions,” Ms. Eichelbaum said in an interview. “You would get the client, as well as their children after they see that you've taken good care of their mother.”
Many financial planning firms struggle with how to keep assets under management when their older clients die. About 86% of heirs in global family offices plan to hire a new adviser once they inherit their wealth, according to research by accounting firm Rothstein Kass.
Advisers would be wise to ask clients who come with one of their children about why the others didn't come, as well. Listen for troubling cues from siblings in response to that question and follow-up inquiries such as, “Is it OK if I call your brother?” she said.
“The more the adviser knows about the depth of the person and their family, the more they can deal with the intergenerational issues that come up with money,” Ms. Eichelbaum said.
The challenges can be even more difficult with large families.
“The more siblings you have, the more probability of dysfunction,” she said.
Financial adviser Steve Stanganelli of Clear View Wealth Advisors LLC said the important dynamics of families typically come out over time, though the right questions can speed up that understanding.
One thing he typically asks clients is whether there are people that the client believes he or she may have to become financially responsible for at some point. Those answers can highlight different important relationships, such as a sister with a drug addiction or brother who increasingly resents having to take care of an elderly parent.
“I try my best to ask probing questions to get a better understanding of what makes the client tick,” Mr. Stanganelli said.
