Estate planning is a hot topic for financial advisors right now, and for good reason. It’s a tough talk, but clients want it. They need to be sure that if the worst happens, their kids know their financial advisor and can carry out their plans. It’s vital to meet with the next generation early on so they stick around as clients and don’t rely on online info for investments.
Enter PreciseFP’s new estate planning engagement. It’s an invitation for clients to discuss their plans and a perfect chance to involve beneficiaries. A cool feature in PreciseFP is secondary contacts, allowing these beneficiaries, and possible power of attorneys, to join in on the talks and build a lasting relationship.
Talking money in families can be touchy. Parents often avoid sharing financial info with kids, thinking it’s private or not wanting to stress them out. But this can lead to issues. Kids might try to handle finances on their own, not always getting it right. Avoiding these talks can cause misunderstandings and conflicts, putting financial advisors in awkward spots.
Starting financial talks as a family is as important as creating shared values and a good financial plan. Clients can start these chats anytime, showing it’s never too late to get things sorted.
7 Steps to Start Talking About Money
1) Start Small
As financial advisors know all too well, managing finances can be complicated. When your clients begin conversations with their families, it’s important to introduce these topics gradually, especially for family members who may become overwhelmed with details because of their age or lack of familiarity with the topic. Conversations that center around the family’s values and goals and how money helps the family achieve them can be a great starting point.
2) What to Include in the Financial Conversation
You can guide your clients to help them decide what’s most important for their family members to know. Examples could include financial priorities (such as education and health care), how to access accounts, assets and liabilities, where to find titles for property and assets, intellectual property, businesses owned, insurance information, emergency planning, charitable contributions, and important documents such as wills and power of attorney, and more.
It’s worth noting the importance of understanding whether families prefer their financial dealings to be kept private or become public record. Without proper estate planning, what is originally a family matter can inadvertently become a public one, recorded in public records for anyone to access. Ensuring a thoughtful and comprehensive estate setup not only protects family privacy but also maintains the confidentiality of financial matters, preventing them from becoming part of the public domain.
3) Schedule a Time
Once your clients know the topics to address with their family members, they should set a time for these discussions to take place. Depending on your client’s family situation, these discussions may occur weekly, monthly, or annually, in person or via video conference. If your clients do not feel equipped to host these discussions themselves, you can offer to attend.
4) Encourage Clients to Share Their Values
When you encourage your clients to share their values, you can help them preserve their legacy. It’s important for clients to explain the reasons behind financial decisions they’ve made so their children are prepared to live by sound financial principles and values-based decisions, even if circumstances and details change.
5) Include Everyone in the Discussion
Financial discussions can become contentious when communication breakdowns occur, especially when some family members don’t share the same opinions. Although they may lead to uncomfortable feelings, financial discussions are much easier for families to handle when things are going smoothly than in emotionally charged situations, such as the death of a loved one or a financial emergency. Financial discussions should avoid judgment, keep communication lines open, and include all family members so everyone feels heard or valued. It also helps to prevent anyone from going rogue and having negative feelings about handlings.
6) Keep the Conversation Going
Although financial conversations may start formally, they can continue in informal settings. When parents are willing to discuss financial information with their children, it can open the door for children to ask questions as they decide their own financial paths. Even for young children, clients can find age-appropriate ways to teach children financial literacy and financial values. If you don’t give them the information, they’re going to find information themselves and oftentimes that is the wrong information.
7) Create Materials for Clients’ Families
Whether or not your clients discuss finances with their families already, you can provide information and resources to help these conversations become more informative, memorable, and even fun! By developing materials for your clients’ family financial conversations, you can help your clients save time, remember important details for discussion, and keep discussions on track. These resources could include:
- Budgeting games
- Budget binders
- Spreadsheets
- Slideshows
- Videos
- Interactive applications
- Checklists
- Templates
With careful planning, you can help your clients share financial information and values with other family members. Although some clients may struggle to openly discuss financial issues with family members, that’s not a reason to avoid the topic. Clarity is vital to ensuring your client’s financial plans come to fruition.
One challenge for your clients as they share financial information with family members is knowing how to organize their information for easy retrieval, distribution, and interpretation.
With PreciseFP you can start talking to your client’s loved ones and build a connection with them. Addressing legacy planning now meets your client’s wishes and helps avoid family issues, showing you understand your families well. Take a look at our estate planning engagement and secondary contacts feature to better meet your families’ needs.
Vice President, Client Solutions | Docupace
