Five family talks advisors should hold to retain heirs

Only 27% of next-generation heirs plan to remain with their parents’ financial advisor after an inheritance, according to Cerulli Associates. Financial advisers can raise those odds by leading five family conversations while older clients and their heirs can participate.

Lisa McCurdy, founder and managing partner of The Wealth Counselor, reports that advisers frequently set up trusts, tax strategies and investment policies but still lose heirs who do not understand the reasons behind those plans or have no relationship with the professionals involved. She recommends that advisers move beyond technical work and help families include younger members in planning conversations.

Advisers should begin by asking clients to name three values or guiding principles they want their wealth to carry forward and confirm whether younger family members have been asked the same. McCurdy uses this exercise with families and has found that it can reveal unexpected alignment across generations. If the values discussion exposes tensions or uncertainty, she advises arranging a family meeting led by a trained facilitator.

Clients should explain the logic behind specific bequests to reduce confusion after they die. When one heir receives liquid assets and another receives real estate or a business interest, the reasons may be clear to the testator but unknown to beneficiaries. McCurdy recommends identifying any parts of the estate plan that could surprise an heir and encouraging clients to discuss intent during their lifetimes. Advisers can offer to join those conversations when appropriate.

Advisers should identify who may act as a decision-maker for the next generation by framing questions around incapacity rather than death. McCurdy suggests asking: “If you had a procedure tomorrow and could not manage your finances for three months, who would step in?” That wording shifts the discussion toward control and reveals potential successors. Advisers should ask clients to introduce the designated person and, where suitable, include that person in future reviews so contact details and trust are in place before an emergency.

Families often have an informal coordinator who manages logistics, communications and elder care without a formal title. McCurdy notes that role is frequently held by a woman who coordinates fiduciaries, tracks family history and handles practical matters. Advisers should ask who in the family is the person everyone calls when something needs to get done and determine whether the adviser has a meaningful relationship with that family member.

Advisers can also create opportunities for heirs to rehearse leadership and responsibilities. McCurdy describes a family that organized a weeklong apprenticeship so scattered heirs could experience family businesses; several participants later relocated and assumed roles. Bringing adult children into appropriate conversations and arranging chances to meet the advisory team gives heirs context for their future responsibilities.

McCurdy emphasizes that the transfer of wealth includes relationships as well as assets. She warns that if an adviser’s first meaningful conversation with an heir occurs only after an inheritance, it is harder to establish the trust needed for a continuing client relationship.