Planners should ask hard questions to keep clients

Financial planners working with high net worth clients should be asking questions about their full financial picture to ensure they don’t relinquish the relationship to another advice provider, according to the head of a family office advice business. 

EWM Group managing director Brad Scott said planners working with high net worth clients need to ask questions around wealth transfer, philanthropy and their wider financial and business needs because these issues will be raised by other professional advisers as well. 

“Planners with these types of clients need to have these conversations and if they don’t the client’s accountant or lawyer or banker or broker will have them. Whoever has that conversation and identifies the issues will direct them,” Scott said. 

He said that planners operating in this space should work with other advisory professionals but could lead the discussion by being able to draw together a picture of the client’s assets and liabilities and directing and guiding the clients and the other professionals in what needs to be done. 

He stated that discussions with clients on these issues, like those involving estate planning, need to happen well before decisions need to be enacted and should include all stakeholders within a family. 

“Seventy per cent of all inter-generational wealth transfers fail and of that number 80 per cent were due to poor communications and planning between the generations of the family involved,” he said. 

Scott stated that while the advice sector for ultra high net worth clients was relatively small it was growing and financial planners looking to move into the space needed to step away from product solutions and become an 'adviser of advisers’. 

“For a planner this has to be a 'want’ because the level of advice will sit at another level and the planner will not be the one to enact the advice any longer but the one to find and direct others to enact the advice,” he said. 

“Planners may feel this will not build their relationship with clients but it actually makes it stickier, extracts more value from the relationship and creates a tighter connection between the planner and client.”