High net-worth clients are expecting more than ever from their financial advisors when it comes to wealth-management services, according to a recent internal survey conducted by Royal Bank of Canada’s wealth-management services division.
The survey found HNW clients are increasingly concerned about the transfer of wealth at death, minimizing taxes, financial needs during retirement (including disability) and philanthropy. The survey was based on 2,500 planning sessions by RBC advisors with HNW clients across Canada over the past year.
Although minimizing taxes and the transfer of wealth have always been a concern for well-heeled clients, the difference now is that more of these clients are looking to their advisors for direction in these areas.
Ten years ago, HNW clients would not have viewed their advisor as someone to approach for help with estate- or tax-related issues, says Howard Kabot, vice president, financial planning, wealth-management services, with RBC in Toronto: “Clients are seeing [advisors] differently now. As a result, [clients are] relying on [advisors], and that makes for a better relationship.”
This trend, he says, suggests you need to be proactive in starting the conversation about wealth management with your HNW clients, as well as introducing them to experts in financial planning, wills and estate planning, insurance and taxes.
This is not to say you should be usurping the role of an accountant or lawyer. The conversation is meant to provide direction, not advice, warns Kabot, who admits it is a very fine line for advisors, particularly with regard to tax issues.
Instead, you should view your role as being master of ceremonies, steering your clients in the right direction and making introductions. Clients can discuss the options in more detail with their personal accountant or lawyer.
Starting these conversations with your HNW clients and introducing them to experts who can help with their concerns will lead to a better relationship and outcome for both you and your clients.
“We’re having much better, deeper relationships with clients — and that, in the end, does result in increased business,” Kabot says. “We get more assets [and] we drive revenue from selling other products.”
Although RBC’s survey was conducted internally, its findings reflect industry-wide trends. As the population ages in general, says April-Lynn Levitt, a coach with The Personal Coach in Calgary, more people are thinking about estate planning and retirement-related issues. To avoid losing business, you need to speak with clients on these issues before a competitor does.
You can start this conversation with your HNW clients, says Levitt, through a newsletter or educational seminars on retirement, estate and tax planning.
To become a resource regarding wealth management for HNW clients, you can either become an expert yourself by obtaining designations or build a team to whom you can refer clients.
If your firm does not provide internal support, Levitt suggests, you can hire experts for your office or build centres of influence with insurance companies, fund companies, accountants and lawyers.
If clients are asking about philanthropy, foundations and trusts are excellent resources. IE