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5 Benefits of a Multi-Generational Advisory Firm and What it Means For You

Many clients of financial advisors share a common concern and fear. Because the process of finding an individual to trust with their money is not something to be taken lightly, this concern can be magnified. Clients wonder what happens to them if their financial advisor retires or unexpectedly dies. This is a legitimate concern. What would happen if your advisor decided to retire to warmer weather and sunnier places? Isn't that something most people work hard for? Or a worse case scenario, what if your advisor was involved in an accident. As a result they have been deemed physically or mentally incapable of handling your finances. Now what...?

Is your financial advisory firm prepared to deal with these what if scenarios?

This commonly voiced concern is why advisory firms and the financial industry have begun focusing more on succession planning and multi-generational advisory teams.

If multi-generational has you thinking “Big Deal” or “Who Cares?”... here are 5 benefits of a multi-generational advisory team and what it means for you.

  1. Built In Transition Planning

Life is unpredictable and we cannot predict the future. What we do know is that change and growing older are inevitable. Just as you are working hard to save enough to retire, your financial advisor is doing the same.

Multi-generational advisory firms have a built-in transition plan. These firms are acclimating their newer and younger associates with current clients. They are leveraging the experience and wisdom that the senior advisors have gained to help train and guide newer associates. Newer advisors will gain experience, knowledge and expertise in the field while working with senior partners. This built in transition plan ensures continuity and no disruption of service to the client.

While this won't happen over night and will require a lot of work, this type of planning is in the client's best interest. Feeling confident that your advisors have a plan for you and your future should be encouraging and expected. Multi-generational family practices offer an additional dynamic where family life, familiarity and genetics can also contribute to the trust factor.

  1. Experience And Wisdom Meet New Technology And Expanded Communications

As an advisor enters into the industry, there is one valuable thing that all of the studying, textbooks, and exams cannot provide... experience. Experience is undeniably an important attribute when looking at an advisor. This can only be obtained with time and is something every new associate has to go through “on the job”. Multi-generational advisory firms are more prepared to alleviate this concern. While they cannot completely eliminate this, aging advisors are able to pass down their experience and wisdom to the next generation of advisors through training and mentorship. This is extremely valuable asset for any new advisor in the field and can play a huge role in their development and client successes.

The veteran advisor also stands to benefit from this relationship. After doing things the same way for a number of years, a fresh new outlook and access to new communication tools will be of tremendous help to the senior advisor and their clients.

Financial planning 30 years ago is not the same as it is today. With technology evolving by the day, the younger advisor can help bridge the gap towards better client service that has continued to evolve over the last 30 years.

Technology. It allows for information to be distributed quickly and efficiently. Next gen advisors are more apt to develop an effective contact management strategy that utilizes modern technology. They are more comfortable with technology which helps implement better client communications.

Couple this with the experience of a veteran advisor and your financial team is better equipped to help you and your family at any stage in life.

  1. Longevity and Continuity

Life expectancies are increasing past age 80. Younger generations are expected to live longer than their predecessors. Because individuals are living longer, they need to build this into their retirement expectations. Americans aren't saving enough as it is. It is more important than ever to plan accordingly.

With clients of all ages having advisors of different ages becomes even more important. Today many advisors are in their 40's and 50's. Let's say you start to work with an advisor in their 50's. What will you do if in 10-15 years your advisor decides to retire and you, as most people, need guidance well into your 80's or 90's? During those years change is inevitable. From a financial standpoint, change requires the adjusting and readjusting of your financial plan to reflect those changes.

With multi-generational support as you progress through life and all of its challenges, you'll have someone there throughout to help guide you and should not have the need to search for a new advisor..

  1. Fiduciary Responsibility

All investment advisors have a fiduciary responsibility to act in your best interest.

Having a succession plan in place is part of this responsibility. There should be a plan for how clients will be handled if an advisor retires, dies or is incapable of acting as your financial advisor due to an accident. Some owners plan to sell their business 100% to the highest bidder. Others decide to have a succession plan where a familiar face of the advisory firm steps in to take ownership.

Having an existing and familiar advisor be appointed as an owner prior to being needed is another benefit of a multi-generational advisory firm. Knowing that your advisor has helped trained and trusts the next generation advisor enough to personally recommend them can make the decision to continue the advisory relationship much easier.

As an advisor, I would prefer to train and work hand-in-hand with the advisors that will ultimately become my successor. This way I can screen them in advance to make sure they are familiar with the expectations of my clients and the relationships we have formed. I believe this enhances my clients best interest and multi-generational firms make this possible.

  1. Working With Your Multi-Generational Needs

If you're currently working with a financial advisor, you understand and see the benefits of financial planning. Most parents who have a financial advisor want their children to do the same. Knowing what they know now, many clients want their children to start sooner than they did. Multi-generational firms' continuity helps you and your children.

Next gen advisors may be able to relate better with next gen clients because they are from the same generation. They grew up with the same technology and may even be facing some of the same financial concerns. The advisory relationship may begin with the veteran advisor and evolve naturally to the younger advisors over the years.

In Conclusion:

Whether its you or your children you're concerned about, figuring out the answer to these “what if” questions is important. There is nothing more stressful than being content and comfortable with your financial advisor and then being forced to find a new one.

Ask your financial advisor these questions and see what his or her response is. If you're unhappy with the response start doing your research at other advisory teams. Look for a advisory team that has that built in transition plan like multi-generational firms. These firms have planned for your advisory needs now and in the future. They are trying to make sure you are comfortable with the relationships for a long time to come. But remember, the decision is always yours.

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