Connect with the next generation now – you’ll be glad you did

When working with clients, it is important to think about connecting with the next generation, their kids. In most instances, they will be the beneficiaries of the wealth, and it is easier for you to continue as the family’s adviser rather than looking for a new client if they should leave. It is important to begin making headway early on and develop your relationship with them over time.

Starting and maintaining relationships with the next generation can present challenges, but when done right it can cement your place with the family for decades to come. It is important to find out how the kids want to communicate and approach them in the way they feel most comfortable.

This usually starts with a conversation with the parents to see if whether it’s best to call, email or text their children to open the dialogue. It is ideal if you can have the parents bring them to a review meeting, introduce them to the firm and set up a plan on how you can stay in touch going forward.

Beyond the communication hurdle, we find there are several other challenges that exist when trying to work with clients’ children. Sometimes parents simply do not want their kids to know about their money, how much they have or even how it is invested. This presents the greatest challenge to the adviser and one that may never be overcome.

The best way to try and connect with the children of these clients is to get an introduction to them and begin working with them on their own finances. You will want to educate them on the importance of saving, diversifying and having a plan, while engaging them to do this for themselves. Maintaining the confidentiality of the parents here is paramount and it also will allow you to build that connection with the next generation.

Sandwich generation

In certain families, it is difficult to get the kids involved in their parents’ finances. This is an obstacle to connecting with the next generation.

It is not uncommon these days to find the kids being pulled in many directions. In addition to their jobs, they are busy attending to the needs of their kids and their parents, too. This is your typical sandwich generation and it leaves them with little time to be concerned and involved in mom and dad’s finances.

When a family dynamic like this presents itself, we find that keeping them involved, even in the smallest way, will help to start and build a relationship.

Simple gestures like sending the kids an overview of meetings we held with their parents and action items that need to be addressed go a long way. This will simply require written permission from the parents acknowledging you can share information with the children. It allows them to be involved, not take too much time out of their day and away from their other responsibilities, and they can provide input by responding back if needed.

As the parents age and it becomes more difficult for them to handle their finances alone, the children’s relationship with the adviser will become even more important. This also provides the advisor with an opportunity to be introduced to the next generation and start a relationship.

It is paramount to most advisory practices to establish, build and maintain relationships with the next generation.

Lawrence D. Sprung is president of Mitlin Financial.