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After years of the word “holistic” being bandied about in the wealth management industry, it’s safe to say many advisors are aware of the benefits of presenting clients with more services under one umbrella. Estate planning is undoubtedly part of that equation. Actually, it’s a paramount.
In bygone eras of advisor/client relationships, the estate planning conversation was a difficult to initiate for both parties. That makes sense because it involves uncomfortable topics. The sentiment has changed as the industry shifted to the holistic model and as clients grow more sophisticated, realizing that proper estate planning benefits their families.
Additionally, the sheer variety of clients that benefit from sound estate planning makes it important for advisors to know how to broach this subject. It affects spouses, heirs and even the heirs’ heirs. So it makes sense that estate planning is a prospect conversion/client retention tool and that’s something for advisors to focus on because this issue is increasingly a point of emphasis for clients.
Advisors: Up Your Estate Planning Game Now
If ever there was a subject where inclusiveness should be prioritized by an advisor, it’s estate planning. At a minimum, the client’s spouse needs to be involved and it’s certainly a good idea to have adult children participate in these meetings, particularly if both parents are of advanced age. Data confirm the benefits of being proactive on the estate planning inclusivity front.
Math bear out the demand for estate. As highlighted in a new Trust & Will survey, estate planning is, at a minimum, a 60/40 issue from clients’ perspectives. The estate planning service points to a rapid rise in demand for these services, noting that 61% “of Americans say financial advisors should offer estate planning as part of their services.” A year ago, just 37% of those queried viewed estate planning as an “essential” service.
Something else for advisors to consider: Lack of adequate of estate planning services can morph into a catalyst for client attrition.
“68% of advised clients would consider switching to another advisor that offers estate planning services. 39.7% are ‘very likely’ to consider it and another 28% are ‘somewhat likely,’” according to Trust & Will.
Advisors shouldn’t be scared by the above percentages, but they should be responsive to them because estate planning spells opportunity. That opportunity is derived from a variety of sources, including increasing economic angst and, as Trust & Will notes, just 42.3% of those surveyed say they have “none of the five core estate planning documents the survey tracked, and another 10.4% are not sure what they have, which is itself a quiet warning sign.”
More Reasons Estate Planning Is Essential
One of the interesting tidbits in the Trust & Will survey is that Gen Z is remarkably prepared on the estate planning front. To be sure, that’s good news, but Gen Z is the least advised major generation, indicating there are significant estate planning deficits among older groups – gaps that advisors should assist in closing.
It’s not just about a vast majority of clients believing that advisors should offer estate planning services. Advisors should be aware that many clients view this as a conversation the advisor should initiate, underscoring a clear shift in expectations.
“The clearest signal of how far expectations have shifted involves accountability. 44.7% of Americans believe it should simply be part of a financial advisor's job to tell them if their estate plan is outdated or incomplete, without being asked,” concludes Trust & Will. “Another 23.5% say advisors should flag it if asked. Combined, 68.2% assign advisors some responsibility for estate plan upkeep. Only 10.5% say that responsibility belongs solely to an estate planning attorney.”
Bottom line: Advisors need to highlight their estate planning suite and be proactive in starting this discussion with clients.
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