Working with a wealth advisor holds many benefits for families. So it is crucial for advisors to prepare to manage client expectations when working with families. While hands-on experience working with families comes with time, it’s beneficial for advisors to prepare for whatever expectations families might have, especially as wealth is a highly personal subject matter.
Advisors should pay special attention to these three specific areas when working with families.
Wealth advisors must prepare for the unique and complex dynamic that families bring to financial planning. Although it’s possible that advisor may serve easy-going families that agree on everything, it is just as possible to have complicated families that bring disagreement and differing opinions with them. Wealth advisors, for the most part, meet families at only one point along an intricate timeline. There is a lot of context that advisors may not have with regard to relationships within a family.
Past disagreements and feelings of hurt may make it difficult for families to agree on recommendations and next steps given by advisors. As financial planners, this can be frustrating. While you might devote a lot of time to managing client expectations, it is just as important to manage your own expectations as a financial advisor. Understanding that some things might be out of your control is normal, especially when working with families.
Working within and around different family dynamics may not be what most wealth advisors imagine when starting their careers. Homing in on soft skills such as communication, interpersonal skills and problem-solving is critical for any financial advisor who works with families. As professionals within the financial service industry, there are many types of people we will interact with. Being able to successfully communicate and appease varying personalities is simply another quality that advisors must have.
Furthermore, money can easily become a touchy subject within families. The advisor frequently ends up becoming the middleman. Being able to juggle different opinions from different members of the same family, while also knowing and prioritizing what the original client requests are, is not an easy task.
Although many of the soft skills required for working with families can be learned through experience, it is helpful to have a grasp of what may be expected of you beforehand.
The top reason clients look to hire wealth advisors is for the future generations of their families. Specifically, they want to protect their wealth and begin investing in ways that will benefit their children and grandchildren. Despite this, however, there is often a disconnect between generations of families, especially when it comes to money. Family members not in direct control of the wealth may have different priorities when it comes to planning for the future.
As advisors, it is vital to use the soft skills mentioned previously to sometimes take on the role of detective. This might involve individual meetings with family members in order to gauge the true interests of involved family members. Younger generations that may have grown up in more affluent circumstances than older generations of the family may have different expectations, and as wealth advisors, we must be able to form a more complete picture out of these individual experiences.
Working with families as a financial advisor can be a very rewarding experience. There are, however, specific skills and actions that should be taken into consideration. Specifically, being able to work with differing personalities that have different priorities is a challenging task that requires practice and patience.
Tim McCarthy is a managing director in Whittier Trust’s advisory services department and is based in the firm’s South Pasadena, Calif., office. He may be contacted at firstname.lastname@example.org.
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