Growing your business? Remember: Her before Heir

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The discussion of age has recently become more common in my conversations with advisors. I have not yet been explicitly asked my own age, but in the spirit of helping advisors maximize their potential, I’m 100% supportive of the new trend toward openness.

Because let’s face it: Age is having a growing impact on practices—especially for advisors trying to buy, sell or grow their books. After all, future growth is handicapped by an aging client base. Based on our analysis of nearly 500 books of non-bank advisors who engaged with our practice management programs from 2015-2017, account growth typically slows dramatically at age 65, turning negative after age 70, even in a normal, positive market environment.

So, whether I’m leading a one-on-one coaching meeting, a group workshop, or giving a presentation at a conference, I’m thrilled when the discussion turns to topics like “the unique challenges of working with aging clients,” “building the right succession plan for my business,” “the investment implications of increased longevity,” and “understanding attitudinal differences between generations.”

But, there’s one angle on age where I believe many advisors are missing the boat: The importance of building a relationship with the spousal heir—who is statistically more likely to be female, according to today’s mortality tables.

When I address the age topic head-on in our flagship practice management workshop, Maximizing Potential, I provide advisors with a custom analysis of the age of their book, sliced and diced in several ways: average client age, median average age, age-weighted average AUM, AUM by various age buckets, etc. to help advisors get a multi-faceted sense for how household age is affecting their business.

When I ask advisors to formulate insights and implications for their business, they easily identify the importance of:

  1. Attracting younger clients to offset the impact of decumulating older clients
  2. Connecting with the next generation heirs to avoid losing the relationship after a client’s death
  3. Building a multi-generational team to help attract and retain a multi-generational client base
  4. Incorporating technology into the practice for efficiency gains and a greater diversity of communication options for clients of all generations

I agree that these are all excellent next steps. However, I would argue that building a strong relationship with the likely female spousal heir is just as important—if not more important. Because before the assets transition to the next generation, they will go to Her. Her before Heir. These women are part of the group of women expected to control two thirds of the nation’s wealth by 2030. They are also included in the 95% of women who will be their family’s primary financial decision maker at some point in their lives.2 I agree with Joe Coughlin, founder and director of the AgeLab at MIT, when he says, “Financial advisors will say that their relationships with clients are good, but they are most often looking at the male client across the table.”3

Connecting with women clients more deeply may mean adjusting the way an advisor does business. For instance, consider these steps:

  • Review your list of top clients and ensure you engage both spouses at least annually. Explicitly invite both spouses to attend the annual review meeting.
  • Consult your Client Advisory Board for ideas on engaging female clients. Ask top female clients for feedback on how they prefer to more fully engage with the advisor’s team
  • Host women’s only events for current and prospective clients. I’ve seen many advisors have success with female-focused events including educational elements and social activities such as wine tastings, luncheons and shopping nights.
  • Ask good questions and practice active listening with female clients in particular.

Bottom line

The financial services industry is making strides connecting with women investors, but advisors should take a close look at their own practices to ensure they’re doing everything they can to build deep relationships with both members of a client household. Because the assets will likely be hers before they’re the heirs’.

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