Why legacy planning is about preparing the people as well as the assets

“We talk about estate planning and the actual transfer of the financial assets to an heir or another generation since the focus has typically been on preparing the assets for transfer,” Tim Huver, Vanguard’s head of distribution, told Wealth Professional. “But, family legacy planning is also about preparing the people for that asset transfer as well.”

Huver said that’s important because the initial wealth transfer will be to women, and statistics show that 70% of women will leave their advisors within one year of a spouse’s death and 66% of children will also fire their parents’ advisor after they receive an inheritance. The program emphasizes the importance of building those relationships since not doing so can put an established business at risk.

While he noted that many advisors are already focusing on this, “the importance cannot be understated”. So, the program helps advisors recognize how important the demographics of their books are and understand how to segment those, so advisors can build relationships and grow their business. It focuses on identifying the risks and opportunities. Vanguard also offers behavioural coaching training and resources to help advisors with various discussions.

“We’re finding that those advisors who have younger books are finding that they’re growing faster in terms of revenue,” said Huver, adding that’s very different than being in a decumulation phase. “So, there’s an opportunity for them to look at how they can position their book demographically toward younger clients and develop not only the assets, but the relationships.”

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