If you’re not talking to your clients about goals for their families, you might be missing an opportunity. While it’s becoming more common for advisors to talk to clients about their financial goals, an important part of that pertains to family relationships. Paul Cieslik, an advisor education specialist and senior vice president at Capital Group, discusses why incorporating a family’s wishes is so important in goals setting and offers tips on how to do it.

Video

 

Transcript

My name is Paul Cieslik. I’m a senior vice president at Capital Group.

Clients hire us to help them achieve a goal. Goal setting involves a dialogue with clients about their hopes and their dreams, and that’s not easy. Our desires can be deeply rooted in emotions.

For us to appreciate what’s most important to our clients, a structure for conversation can be helpful. Most, if not all, of these aspirations are connected to clients’ families. Spouses want to ensure their surviving partner will have the financial resources they need to enjoy life. Parents want their children, and often their grandchildren, to receive the high-quality education that they need to succeed in the careers of their choice.

First, consider who we’re speaking with. Are we considering the family relationship or the client? Most would argue that our practice and our clients would benefit from a multigenerational view. A more narrow approach could lead to problems in the future. What could we do to align our conversations in service to avoid this risk?

First, implement a structure with all client conversations to identify the three E’s: The Essential, the Enhancer, and Endowment goals. This is the structure we use at Capital Group to help our clients articulate the things that matter most to them. You may refer to these as needs, wants, wishes: Ask what day, month, year they want to make their career optional; exactly how much after-tax income they want; what size home; and where are they considering a vacation property?

By taking this approach, you will not only be making a deeper connection with your clients and their goals, but you will also further demonstrate your value to clients and their families. You will better position yourself to be the advisor of choice for the next generation, an increasingly important position given the estimated $30 trillion of assets that will be passed to heirs over the next few decades.

Having a far reaching discussion of your goals and bringing your family members into the conversation can benefit everyone. Your clients will gain more trust in you, and possibly put you in charge of an even greater percentage of their assets. And by obtaining a clearer picture of their goals, you can do a better job of helping clients build and maintain the appropriate investment portfolios. Furthermore, you will have established at least a foothold in possibly a much stronger relationship with your next generation of clients.