Why Advisors Should View Estate Planning as 'Relationship Insurance'

Core Insights - Estate planning services are becoming essential for wealth managers to build and maintain client relationships, moving beyond being a "nice to have" service [1][2] Group 1: Importance of Estate Planning - Many advisors do not implement estate planning with clients, leading to missed business opportunities [2] - Engaging in estate planning opens up opportunities and aligns with clients' long-term goals, countering the misconception that it is unimportant [3] - Higher retention rates and increased share of wallet opportunities are observed when estate planning is integrated from the beginning [4] Group 2: Relationship Dynamics - Estate planning should be viewed as "relationship insurance" that strengthens ties among family members and between advisors and clients [4] - A significant percentage of families (at least 60%) face disputes over estates, highlighting the need for proper planning to mitigate conflicts [5] - Estate planning can help solidify relationships with the next generation of family members who may inherit assets [5] Group 3: Wealth Transfer and Client Retention - The upcoming wealth transfer, estimated in the tens of trillions of dollars, necessitates discussions about asset management to prevent client outflows [6] - Lack of connection with the next generation is a major cause of client outflows for registered investment advisors, making estate planning a crucial tool for engagement [6]