Many advisory firms worry about how to build connections with their clients' children, so that assets under management don't evaporate after a client's death.
Schwan began his firm's Prepared Heirs program back in 1999 after hearing from clients that their children were not properly informed about finances. In the beginning, participants were mostly existing clients; even now, Schwan says, roughly 90% of firm clients will at minimum attend an initial meeting with younger family members to formulate a plan.
But over the years the firm, which has assets under management above
Participants in this program pay a separate annual fee that can range from
About two-thirds of Schwan's 36 staff members now work at least partly on the program, he says. "As I get older I find my real passion to be in this area," says Schwan. "I really love working with the next generation."
AHEAD OF THE TREND
Schwan seems to have been ahead of the curve in terms of setting up a formal family education program. Since the 2008 economic recession, an increasing number of wealth managers have focused on family education, says
"Five to 10 years ago you really wouldn't hear anything about family education," says Harte Clyne. But in the wake of the financial crisis, she says, many wealthy clients began to worry about sharp declines in assets and understand that their own investment decisions would need to be revisited going forward. The crisis "led families to realize they need to have some economic self-defense," she adds.
She expects those numbers to rise steadily in 2014, adding that the majority of its 500 members have reached out about setting up formal family financial education platforms.
"We're having a little trouble keeping up with the demand," says Harte Clyne. "The need has skyrocketed."
Other firms are following suit as well. Ascent
Ascent's client base consists of families with more than
Meanwhile, Schwan says other financial planners across the nation have reached out to him for guidance in setting up similar programs for clients. "I think we started a template for this type of program," he says Schwan, who added that. "You really need an infrastructure in place to do something like this.”
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