Heritage Institute Blog

In a split second, you'll know what really counts

2008-06-02T12:13:00.000-07:00

Your house is on fire. Once you've made sure your family and pets are safe, you realize you have a minute or so of safety to go back into the house to retrieve one armload of possessions. What would you take? The business records that are packed in boxes in the den? The laptop upstairs? Maybe your briefcase from work, with its only copy of that important report?

In all of the years we have posed this question to folks, we almost always get the same answer. They would save the family photos. The ones on the wall that are irreplaceable, the ones in the scrapbook that they've been meaning to scan digitally, but haven't gotten around to. Pictures. Memories. A tangible link to the past, and to the most important moment's in a family's life.

When it comes right down to it, when it's crunch time, family is what counts. The Heritage Process was developed in large part as a way to make sure that what matters most to you is protected, nurtured and preserved–for generations. It supplements good traditional planning with a step-by-step process that will strengthen, guide and inspire your family for years.

What's your plan for protecting what matters most to you?

Family Retreat Action at Clients Forever

2008-05-06T15:07:00.000-07:00

THI Instructor and Mentor Bill Eck leads Clients Forever attendees through a simulation of the Family Retreat. Somebody is about to be handed a really big check.

Welcome THI's Newest CWC, Todd Rhine

2008-05-06T13:17:00.000-07:00

Hilton Head Island, SC, advisor Todd Rhine has completed the requirements for the Certified Wealth Consultant designation. Today, Heritage Mentors and instructors Bill Hughes (left) and Pam Cundy (right) presented Todd his CWC certificate.

Our congratulations and best wishes, Todd.

Clients Forever Leadership Award Winner

2008-05-06T10:50:00.001-07:00

Heritage course instructor and mentor Bill Hughes congratulates Clients Forever attendee Simone Fevola. Simone was selected by the course mentors and instructors for his outstanding leadership during small group exercises.

Experiencing Guided Discovery for the First Time

2008-05-06T10:03:00.000-07:00

People attending Clients Forever get a hands-on introduction to each of the steps in the Heritage Process. Here, attendees Gordon and Cindy Lawlor are led through a mini-Guided Discovery by CWC and Course Mentor Pam Cundy.

Clients Forever Class, Portland, OR May 5-7

2008-05-06T09:43:00.000-07:00

The Heritage Institute's flagship introductory course for advisors is going on this week in Portland, OR. Clients Forever introduces advisors to a six-step process through which they can develop new, deeper and more fulfilling relationships with their clients.

It’s all about understanding....

• How to build better relationships with the right clients.
• How to collaborate effectively with the clients’ other advisors.
• How to do what you want to do, the way you want to do it, with the people you want to work with, intentionally and at the highest level - every day. This is training that will help you give your best, for the right reasons, to the right people.

Surprising Information About Your Client's Children

2008-05-01T21:10:00.000-07:00

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.

Question of the day.

2008-04-29T12:44:00.000-07:00

Are you making the kind of difference in the lives of your clients that you always wanted to make? If you're not 'completely there,' what would your business, and your life, look like if you were able to do that, intentionally, ever day?

But, I've already done my planning!

2008-04-29T12:34:00.000-07:00

Many people have spent considerable time and money completing their financial planning. And, as far as planning for the future of their money (that is, making sure that as much money as possible gets past the tax collector and on to the heirs!), most people have done a pretty good job.

But, planning for the future of your family is not the same as planning for the future of your money. Studies show that 90% of the time the money is gone by the end of the third generation. That means that 10% of families are doing things right.

Think of a family (or families) who have kept their families and their fortunes together for multiple generations. What do you think they have done in order to beat the 90% inheritance plan failure rate?

The role of values.

2008-04-29T12:32:00.000-07:00

If you knew that there was a 90% probability the inheritance plan you have so carefully crafted for your children and grandchildren was going to fail them, what would you do?

It is no idle question. Studies show that inherited wealth is lost in six out of ten families by the end of the second generation, and that by the end of the third generation ninety percent of families have blown through the family fortune. More importantly, as the family affluence steadily dwindles, and finally disappears, the family itself is often left shattered. The old adage, “Rags to riches to rags in three generations” has been true for centuries. Even so, the goal of traditional inheritance planning is still to minimize taxes, and to pass as many assets as possible to the inheritors. Professional advisors usually do a good job of achieving those objectives; but, if the family itself is destroyed in the process, how can we call that success?

The true measure of the promise created by an inheritance plan cannot be found on the bottom line of a personal or business balance sheets. Those numbers define a condition–they do not describe a family.

There is a gap between traditional planning, with its focus on asset transfer and taxes, and the strength and unity which people would like to see families enjoy in the years ahead. To bridge the gap, The Heritage Institute created The Heritage Process, a unique and powerful process designed to strengthen and unify families for generations. It does this by uniting the values and beliefs the client holds dear, with the financial wealth they have earned. It is based, in part, on the reality that for the inheritors to thrive as individuals and as a family, they must understand that the money is only a tool. The best use of that tool is to support the values, traditions and causes which helped to shape the client’s success.

Many advisors make at least some mention of values when they do traditional planning so that their clients can invest in areas that reflect their values. That is an important step, but it does not begin to address the real need for ongoing mentoring, training, family communication, and other concrete skills that families must learn and practice if they are to beat the 90% inheritance failure rate.

If you believe, as we do, that it is what you value, not the value of what you own, that is truly important, then you will appreciate that the steps to success as a family are also those by which wealth can be successfully transferred across generations.

Putting family before fortune when you do your planning may be the only way to save them both.

What would it mean to you and your practice if your clients were giving you a larger portion of their assets and making more introductions to you?

2008-04-29T11:47:00.000-07:00

According to a study commissioned by Van Kampen Funds, your ability to connect with your prospect’s core values is crucial to maximizing your relationship with them, and to getting them to provide you with more and better introductions. They identified 8 "core categories" of biographical knowledge of the client that would not typically be found in the client intake sheet or fact finder questionnaire, but would have a definite influence on whether or not the client felt 'understood' by the advisor.

• Specifically, if the prospect perceives you know all 8 of their major core values, you end up with 100% of their assets and 4.1 introductions.

• If they perceive you know 5 of their core values, you end up with 72% of their assets and 1.7 introductions.

• If they perceive that you know 2 or fewer of their core values, you end up with 50% (or less) of their assets and no introductions.

The problem, of course, is that you are not going to ‘get’ those 8 core values from typical intake forms or fact-finding interviews. To do that, you must build better relationships.

Pre-Inheritance Experiences

2008-04-29T11:45:00.000-07:00

The primary purpose of estate planning should be to give children just one thing: experience. Why? We tell clients it is because planning and preparing for the future of their money is not
the same as planning for the future of their family.

If your client’s goal is to strengthen, motivate and unify those who will follow them, and if they want to save both their family, and the assets for which they have worked so hard, their children and grandchildren must be prepared to receive their inheritances.

We help families to prepare their heirs to receive both kinds of inheritances, financial and emotional. This is done in part through what we call ‘Pre-Inheritance Experiences.’ One of these experiences is an organized family retreat. This is a family forum that is conducted through adult-to-adult communication. For many families, this is the first time that adult children have interacted on this level with their parents or grandparents.

At the retreat, the focus of activity is on:
- Establishing communication among family members.
- Confirming that the children's 'real' inheritance has already
been received.
- Organizing a family structure for unity.
- Passing leadership to the next generation.
- Preparing heirs to receive valuables without deteriorating
their values.

With the right preparation, children can discover that what they stand for is more important than what they own. That’s an inheritance they will never lose.

It takes preparation.

2008-04-29T11:38:00.000-07:00

You know the family or have heard the stories: the young
person who inherits a million dollars only to burn through
it with fast cars, drugs and partying. Or the quarreling
siblings who discover after their father dies that they are now
partners in his business, which, of course, they promptly
run into the ground by draining every dollar they can
squeeze from the operation.

What is it about inheritance? Why do so many children treat
their financial inheritances like a personal candy store? Most
importantly, what can you do to prevent the likelihood that
your own inheritance plans will end up hurting those you
most want to help?

Be prepared.
Studies show that six out of ten inheritances are completely
spent by the generation that receives them. By the end of
the next generation, that number increases to 90%. Why?
In most cases the answer is as simple as this: the inheritors
were not prepared.

We can receive two kinds of inheritances. The most obvious
is financial. That includes money, property, privately held
businesses and other ‘valuable’ assets. The other kind of
inheritance is an emotional one. It is made up of the sum
total of the values, character traits, relationships and family
events that we experience as we grow. There is universal
agreement among experts that of the two, the emotional
inheritance is more important in terms of how it helps
children to live fulfilling, meaningful lives.

What’s remarkable about the emotional inheritance is that
you pass it to your children and grandchildren every day. It’s
fair to say, in fact, that they have already received the most
important inheritance of all.

Is The Heritage Process for you?

2008-04-29T10:06:00.000-07:00

Is The Heritage Process for you? Only you can decide. Fortunately, making that determination is easy. Just take a few minutes to answer the following questions:

1. If you could look into the future 50 years, and you could see your family gathered together, what would you like to see? It is usually easy to say what you don't want to see. For example, most folks do not want to see only a few of their family getting together, or that some family members are living unproductive lives. When you look into the future, and see your family, what kinds of things would you like to see, and what kinds of conversations would you like to hear?

2. Now, think about the financial and estate planning you have done. How far will that planning get you towards the picture of your family that you just described? Hopefully, it will pass your money into the future. But, does it accomplish the other parts of what you would like to see in your family 2 or 3 generations from now?

If your existing planning does not get you all the way to what you would like to see for your family in the future, then we invite you to explore The Heritage Process. This proven process will help you pass your values, standards and principles to future generations, and will work with your financial and estate planning keep your family and your fortune together for many generations.

And, if there is anything you would like to know, in order to determine whether this Process is right for you, we invite you to post those questions on this BLOG.

What do inheritors really want?

2008-04-29T09:53:00.000-07:00

According to a recent national survey of baby boomers and their WWII-era parents, non-financial items that parents leave behind-like ethics, morals, faith and religion-are ten times more important than the money. In fact, 77% of the adult children said the most important inheritance they could receive or pass on would be values and lessons about life.

The life insurance company Allianz surveyed baby boomers and their parents about their attitudes on everything from the importance of fulfilling last wishes to passing on real estate and assets.

"Many people wrongly assume that the most important issue among families is money and wealth transfer -- it's not," said Ken Dychtwald, a gerontologist, and designer of the survey. "What we found was the memories, the stories, the values were 10 times more important to people than the money."

While Boston College's Center on Wealth and Philanthropy estimates baby boomers and their parents will transfer wealth and other assets worth at least $41 trillion dollars to family members and charities over the next 47 years, that was not the most important issue to those individuals polled in the study.

Some 77 percent of those polled in the study -- baby boomers, who ranged in age from 40 to 59, and elders, age 65 and older -- said the most important inheritance they could receive or pass on would be values and lessons about life.

While both boomers and elders said they felt confident talking about these subjects, less than one-third of either group had comprehensive discussions about all the issues related to inheritance.

What kind of advisors provide The Heritage Process?

2008-03-31T14:03:00.000-07:00

The short answer to the question, 'What kinds of advisors provide The Heritage Process?' is this: they are accomplished professionals who put the genuine needs and interests of their clients and their clients' families above everything else.

From a professional discipline standing, Heritage advisors cover the spectrum: they include estate planning attorneys, financial planners, CPA's, non-profit officers and other professionals who work in the planning arena.

Their training is rigorous; to become Certified, advisors must successfully complete a course of study and ongoing training that is as demanding as any MBA program in the nation. They become expert not only in the administration of the steps of the process on behalf of their clients, but proficient, too, in a skill that is all-too rarely seen in the world of planning: team collaboration. Heritage-trained advisors work diligently to build and coordinate effective, efficient teams of professionals who share the Heritage advisor's focus on discovering, articulating and implementing the client's vision.

And, when we talk about the 'kinds' of advisors who choose to work with The Heritage Process, there is something else that makes them unique among professionals: their commitment to a code of ethics and a philosophy that are based on their belief in a "Family First" perspective.

People who are guided through The Heritage Process tend to develop deeper, more meaningful and significant relationships with the advisor in ways that that can deliver concrete benefits to the client, their family, and to the causes in which they believe–for generations.