Surprising Information About Your Client's Children
A study worth thinking about:
According to the experts, better client relationships are the key to more income, a smaller client base,and greater peace of mind. Many advisors assume that following the death of a client, the inheritors will retain the same advisors who guided their parents or grandparents. In the overwhelming number of cases, that is not what happens.
According to a study done for Merrill Lynch Investment Managers by Prince & Associates:
“The data proves that the conventional wisdom that inheritors will work with their parents’ advisors is unfounded. Just a tiny percentage (under 1%) of inheritors remained with their parents’ primary advisors. Almost universally, inheritors go to a new advisor--someone they perceive will meet their unique needs.”
While there is indeed a substantial opportunity in the inheritors market, it’s nearly the exact opposite of what most advisors think it is. One widely held industry belief is that if the client of a loyal and competent advisor inherits a substantial sum, that client will probably continue to work with the advisor. After all, if the advisor has stuck with the client through thick and thin, then why wouldn’t the client likely choose to maintain a functional and well-developed relationship? Empirical research by Prince, however, clearly shows that the vast majority of those who inherit a substantial amount switch advisors.
Conclusion: there has never been a more critical-or more opportune-time to build strong relationships with your clients and their families.
According to the experts, better client relationships are the key to more income, a smaller client base,and greater peace of mind. Many advisors assume that following the death of a client, the inheritors will retain the same advisors who guided their parents or grandparents. In the overwhelming number of cases, that is not what happens.
According to a study done for Merrill Lynch Investment Managers by Prince & Associates:
“The data proves that the conventional wisdom that inheritors will work with their parents’ advisors is unfounded. Just a tiny percentage (under 1%) of inheritors remained with their parents’ primary advisors. Almost universally, inheritors go to a new advisor--someone they perceive will meet their unique needs.”
While there is indeed a substantial opportunity in the inheritors market, it’s nearly the exact opposite of what most advisors think it is. One widely held industry belief is that if the client of a loyal and competent advisor inherits a substantial sum, that client will probably continue to work with the advisor. After all, if the advisor has stuck with the client through thick and thin, then why wouldn’t the client likely choose to maintain a functional and well-developed relationship? Empirical research by Prince, however, clearly shows that the vast majority of those who inherit a substantial amount switch advisors.
Conclusion: there has never been a more critical-or more opportune-time to build strong relationships with your clients and their families.
posted by Heritage Institute Blog at
9:10 PM
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