Most financial advisors have heard of intergenerational selling. You know you can sell up and you can sell down. Let’s sell across while we are at it. There are multiple opportunities when you can work with both your clients and the generation before them — their parents. Here are a few of those opportunities.
- Your client has no money. Their parents do. Your clients are younger and starting out in their careers. They may do a limited amount of business. The real wealth is with their parents. If your client has made a success in the early stages of their career, the parents might respect them for their good judgment. Your client can talk about the good things you’ve done for them. They can also tell their parents how you may be able to help them as well. You need to educate them first.
- Parents care for their children, then roles change. It’s been common throughout history that children represented the parents’ retirement plan. They raise the kids, the kids get jobs, the kids support their parents as they get older. Some clients might consider this a chore or a burden as they struggle to find ways to pay for the increasing college costs for their children. Commend them for being good sons and daughters when they visit their parents or help them out financially in whatever ways they can. Behavior that is rewarded is often repeated.
- Financial decision-making often devolves to the children. As people enter retirement, they often want the best income on their assets. They might only consider a limited range of options. They look to their grown children for advice. These children are your clients. You can let them know you have helped others in a similar situation and might be able to help them too. The children become your advocates, but they need to understand how the product or investment works before they give their seal of approval.
- Life insurance becomes an annuity. Your clients’ parents need additional income. They may have some life insurance policies with substantial cash value, but are they aware these policies can be rolled into an income-producing annuity?
- Downsizing. Your clients’ parents might be living in the large family home, doing maintenance themselves because they want to pass this asset to their children someday. It’s the family home after all! The children already have their own homes, though. They privately agree that the family home is a maintenance nightmare, and the taxes are high. Should the children talk to their parents about downsizing and putting the extra cash realized from the sale into income-producing investments?
- Health comes first. We need more medical care as we get older. Do your clients’ parents have the best health insurance? If not, why not?
- Estate planning. When there’s a lot of money involved, estate planning is important. It’s best done sooner rather than later. Tax laws can be fluid, changing from one election to another. Have your clients’ parents considered estate planning? Do they know where to seek advice?
Very often, it’s the clients’ parents who have both the larger pool of assets and the greater needs. You help your client. Can you help their parents? Does your client know how?
Bryce Sanders is president of Perceptive Business Solutions Inc. His book Captivating the Wealthy Investor is available on Amazon.
For more about selling to different generations in this MDRT member-exclusive content:
Milind, you make excellent points. Often the younger family members are advisors to the older generation concerning how to handle and protect their savings to produce income.
Assurance of known and guaranteed inflow of money for senior citizen is always keeps them in good state of mind. So it in a way keep them in good state not only physically but mentally also.
And it keeps an happy environment in the family