Broadening your portfolio to include estate planning can be a highly effective means of expanding your practice, but advisors who are considering entering this market should be prepared to make subtle changes in the way they interact with clients. Higher-net-worth consumers -- the typical target for estate planning services -- have complex needs that require agents to shift from offering pure asset allocation advice to providing comprehensive wealth management and holistic financial planning services.
The transition
Adopting a wealth management approach begins with the types of questions you ask the client during your very first meeting. Rather than drilling down on the client's assets, you should begin by asking more personal questions that touch on all aspects of the client's financial situation in order to gain a better understanding of the client's goals and priorities. For instance, you might ask them to describe how they feel about money and what they value most. High-net-worth clients will expect you to ask questions like this, and they are generally comfortable with a consultative approach that focuses on their life goals, not just their financial goals.
You will need to focus not only on the individual client but also on their entire family. For example, you should know how many child-ren and grandchildren the client has and where their immediate family members are located. Ideally, you will eventually interact with these family members and involve them in the financial planning process -- and the entire family unit will become your client.
The education
Estate planning demands a broad base of knowledge. Before you start prospecting for estate planning clients, take the time to educate yourself on the topics that will help you provide expert advice. You will want to become well-acquainted with the provisions of the Pension Protection Act and familiarize yourself with various tax laws. You should also keep yourself informed of ongoing legislative changes that might impact your clients. Your broker-dealer can be a valuable resource for helping you gain the expertise you need to succeed, and firms with comprehensive education platforms can provide specialized training and continuing education support.
Obtaining an industry designation will not only expand your knowledge of advanced financial planning techniques, it will also add to your credibility as an experienced advisor. The Certified Financial Planner designation is an excellent place to start because it requires you to complete a comprehensive course of study that covers the entire spectrum of financial planning topics, including tax planning, investment management, and estate planning.
Earning the CFP certification is a rigorous process that demands a significant time commitment, but it is arguably among the most widely recognized and respected designations in the industry, and many clients seek out the CFP designation as a way to identify an ethical and competent advisor. You may also want to consider pursuing an estate planning-specific designation such as Certified Estate Advisor (CEA), Certified Estate Planner (CEP), or Chartered Estate Planning Practitioner (CEPP).
The marketing
Once you have spent enough time acquiring the knowledge you will need to offer estate planning services, it is time to begin marketing yourself as an estate planner and wealth manager. One of the most effective ways to promote yourself as an expert is through community outreach. Identify key organizations in your community that could benefit from your experience and expertise, and offer to deliver free educational seminars on various financial planning topics. Submit articles to local newspapers and industry trade publications and approach local media with an offer to host talk shows or provide market updates.
The prospects
Next, consider what type of individual you should target as a potential client. Small-business owners tend to be good prospects for estate planning services. These entrepreneurs have the potential to become high-net-worth individuals, and they typically need specialized services that go beyond basic financial planning. It's necessary to learn what is important to them and to gain a strong understanding of how their business is structured. Succession planning is a major concern for small-business owners, and you can work with their entire family to help create an effective succession plan that will ensure the future viability of their business.
Nonprofit organizations are another good source for estate planning networking opportunities. Those individuals who contribute to nonprofits usually have significant wealth, and they often spend a lot of time participating in various events for organizations. Volunteering for a nonprofit is an excellent way to meet potential clients -- your involvement in the organization demonstrates your commitment to supporting an important cause and helps establish you as a trusted member of the community.
The partnerships
Estate planning is extremely complex, and no financial planner can be expected to master all of its nuances. Estate planning clients typically have CPAs, attorneys, and other specialists with whom they consult on a regular basis. By forming strategic alliances with these individuals, involving them in the financial planning process, and drawing on their specialized knowledge, you can create a comprehensive financial plan that incorporates all aspects of your client's situation.
The final step
Once you have successfully brought your first estate planning clients aboard, the next step is to retain them. The key to client satisfaction and retention is consistent communication, which can help generate new business and ultimately grow your practice. Your existing clients are your No. 1 source of referrals, and with regular communication, your clients are more likely to recommend your services to their friends and family members.
Making the transition to estate planning and wealth management is an excellent way to take your practice to the next level. It starts with a strong base of knowledge and a familiarity with complex financial planning strategies so you can promote yourself as an expert on a variety of estate planning topics. Community involvement and targeted outreach can help you uncover potential clients and begin to establish trust with them.
During your first client meetings, ask questions that delve deep and help you understand the client's values and aspirations. Form alliances with CPAs and attorneys early on, and work with them to gain a comprehensive view of your clients' situation and all of the factors that might impact them financially. Finally, by consistently communicating with your existing clients and providing them with exceptional service, they will be an invaluable source of referrals for years to come.
Shelly Megna is vice president of Advanced Product Solutions & Marketing, INVEST Financial. She can be reached at 813-880-5218 or shelly.megna@investfinancial.com.
