How the Family Unit is Redefining Your Client Relationships
Episode 8516th November 2022 • Human-centric Investing Podcast • Hartford Funds
00:00:00 00:23:48

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Family wealth management has the ability to redefine your client relationships. David Specht, Director of the Global Family Business Institute at the Drucker School of Management, shares his insights on why serving families opens the door to knowing the “wealth creator”—and who’s most important to them—on a deeper level.

Transcripts

John Diehl [:

Julie Genjac [:

John Diehl [:

Julie Genjac [:

John Diehl [:

Julie Genjac [:

John Diehl [:

Julie Genjac [:

John Diehl [:

Julie Genjac [:

Dave Specht [:

John Diehl [:

Dave Specht [:

And what happens is we typically don't pivot to the family. But if you're talking about generational wealth, it's important that we build our practices around serving the family unit rather than serving just the wealth creator. If you think about some of the main challenges that advisors face, one is retention. And as you look at the aging client population, you know, a client that passes away if there's not a relationship with the spouse, first of all, and a level of respect and a level of closeness to that spouse, you are not going to be able to retain those assets. The other thing I learned, John, was that if you do not have processes in place that serve the rising generation and that look at what are the specific needs that they have, ultimately they see you as my my dad's advisor or my mom's advisor. And that does not position you. Able to retain that client and and to be able to serve them. The last thing I'll say about serving the rising generation, John, is that there is no better way to endear yourself to a parent than to serve their their children. And so if you look at what happens to assets, a lot of times these clients that we have, they have multiple advisors.

But when we redefine the client relationship from serving a wealth creator to serving a family unit, they are much more likely to consolidate those assets. When you've taken an interest in their spouse, when you've taken an interest in serving their rising generation, helping them to have a healthy relationship with money and be prepared to manage that money.

Julie Genjac [:

Dave Specht [:

that rising generation, then there's a one to many effect that they can achieve without, you know, exhausting a lot of time. The other thing is, is continuing down that one to many effect is to hold events for those subgroups. So one instance we did a mothers and daughters event and a lot of the the daughters had not had a relationship with the advisors. And that was an opportunity to serve many family units at the same time and be able to create an experience and a memory that was connecting the advisor to to the mothers and the daughters. There's also a number of advisors that have started to invest in doing rising gen summits, whether they will bring 10 to 15 of their clients rising gen together, you know, for a half day to do some education. And ultimately, what that does is it creates a peer group, and then they come home and talk to their parents about the experience that they had. So I would really, you know, think of the one to many opportunities first. And then as you move up in wealth and complexity, you can you can afford to serve fewer clients, but to go into greater depth. And from there, once you're serving kind of the top to your clients, you can afford to bring in a another advisor to work with you that may relate better to the rising generation and to create other programs. But I think the first thing to do, Julie, is to start with the one to many approach with marketing and also with events.

John Diehl [:

Dave Specht [:

Julie Genjac [:

Do you have any other language, Gene, or talking points that you found that have been successful for that financial professional that again, realizes that this really is the next iteration of their practice, but maybe has has to overcome some of the the nervousness or the anxiety in really delving deeper into these conversations.

Dave Specht [:

John Diehl [:

Dave Specht [:

And, you know, oftentimes we do hear clients coming and they want kind of what their friends had. Well, that's great. You need to address that. But then also talking about there's that opportunity to say, all right, that that makes sense. But let's talk about some of the non-financial implications, like how does this affect your spouse? How does this affect the rising generation? How do we prepare to have conversations around this technique or strategy? And so I think you just start where they are, but then you're prepared to ask them some tough questions and really to get them to into story mode.

Julie Genjac [:

Dave Specht [:

Let me give you one more. If you could bequest one of your values to the rising generation, what would it be and why? So again, it's kind of confusing. Like you're talking about a bequest. Usually that's like, what money am I leaving? Or What thing? Am I leaving to my kids? But if you could bequest one of your values to your rising generation, what would that be and why? And then there's a great opportunity to just follow up on whatever they say and say, you know, how how are you strategically going about doing that? And and how is your advisors? Might we support you in that? So those are a couple of of my favorites.

John Diehl [:

Will you abandon ship at that point? Like, what do you recommend? How should I be thinking about that if I if the client comes back to me initially with a I'd rather not go there.

Dave Specht [:

but it all comes back to you. Can they feel that you genuinely are curious about their life and if they feel that, you know, they will likely let you in?

John Diehl [:

Dave Specht [:

John Diehl [:

Dave Specht [:

John Diehl [:

Dave Specht [:

John Diehl [:

Dave Specht [:

John Diehl [:

Dave Specht [:

John Diehl [:

Dave Specht [:

John Diehl [:

Dave Specht [:

John Diehl [:

Dave Specht [:

John Diehl [:

Julie Genjac [:

our unique contributions. But I can't encourage the conversation enough. And it sounds like for those financial professionals willing to be a little bit vulnerable, to ask some great questions and then get comfortable with the silence, that this can be an incredible way to really deepen relationships, grow the practice in the team by paring down household. So we can't thank you enough for your invaluable advice and guidance today and, and some of the specific questions that you've shared. And I'm hoping that all the financial professionals with us today feel the same way. So thank you so much for joining us on our Human Centric Investing podcast.

Dave Specht [:

Julie Genjac [:

John Diehl [:

Julie Genjac [:

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