What, Why, and Whoa! Three Reminders for Advisors and Clients

Traveling to a different country allows us to experience new things and people. But it also sometimes puts us in situations that can be uncomfortable or at least require us to step back and consider how we view the world.

Recently I traveled to Hong Kong and Singapore to meet with colleagues and clients. These meetings covered several topics, including wealth transfer considerations, creating high-performing teams, and how to help clients by using behavioral coaching techniques. Through this experience, I was reminded of three ideas that may be useful as you meet with current and prospective clients.

What: A new question to reframe legacy planning intentions

The Great Wealth Transfer has been a topic that we in financial services have discussed for years. A recent analysis expects that between 2023 and 2030, families in the Asia-Pacific region will transfer $2.8 trillion to younger generations, families in North America will transfer $10.6 trillion, and families in Europe will transfer $3.5 trillion.¹

With all these wealth transfers on the horizon, it’s important for families to think about the gifts they want to provide to the next generation, either during life or upon death. Will they be equal or unequal bequests? Will they be in cash or a combination of assets?

These are the questions advisors commonly ask clients in estate-planning conversations. But during a conversation with several advisors in Singapore, we happened on a different way to frame this question and clarify the topic:

“What is the purpose of this gift?”

I think this prompts families, especially parents, to really think about what they’d like to accomplish through their gifting and legacy planning strategies.

Another way to phrase this might be: “How would you like this gift to impact the life of the recipient?”

However, you choose to frame the question, it’s important for families to thoughtfully consider their answer and then, if needed, explain the rationale to the recipient(s).

Why: The importance of articulating your team’s purpose

The number of advisor teams continues to grow across the industry. For example, 77% of Merrill Lynch’s 15,000 advisors have teamed up together.²

There are numerous business and personal reasons to consider creating a team. A recent report from Kitces.com showed that time is used more efficiently, firms have more confidence in their fee structures, and revenue per client goes up under a team structure.³

Considering all these advantages, I expect more and more advisors to create teams. But there is an important question to consider as a team is created: Why?

Importantly, I’m not suggesting advisors ask this question from the standpoint of the value and efficiency that will be created by forming a team. Rather, a team needs to ask themselves, “Why do we exist?”

Think back to the famous Simon Sinek Ted Talk, “Start with Why.” Everyone knows what they do and how they do it, but do they really understand why they do it?

During my meetings in Hong Kong and Singapore, I gave the advisory teams I met with that question as homework. And the answer isn’t just relevant to the advisors on the team; being able to communicate your “why” to clients and prospective clients is incredibly important. If you can’t articulate your purpose, clients won’t have anything to connect to. They won’t be able to see how you can meet their needs or help them reach their long-term goals.

Whoa! The power of flexibility in times of stress

My trip to Asia also coincided with Typhon Ragasa. The storm was the first super-typhoon of the annual typhoon season, with wind speeds up to 125 mph that affected the Philippines, Taiwan, Vietnam, China, and Hong Kong. Hundreds of flights were cancelled, and the Hong Kong International airport was closed for 36 hours.

I was lucky enough to get out of Hong Kong before the storm made landfall, but my schedule changed, which meant colleagues had to step in and meetings had to be cancelled.

This ordeal reminded me of how important flexibility can be during times of stress.

Our clients need to know this as well. Markets go up and down, economic cycles wax and wane, accidents happen, money is lost and won. But if we can’t be flexible and make necessary changes, we will completely lose track of the path we are on until the path itself is lost – and its endpoint with it.

Clients need to ask themselves: “Are our financial plan and goals flexible enough to withstand the ups and downs of the market?”

Advisors are central to helping clients answer that question. I have found that reminding clients that “stuff happens” plants an important idea in their minds and help them prepare for the unexpected. That mindset, along with the answer to the question above, can help clients withstand the unpredictable whims of the market and the emotions volatility can trigger.

New perspectives, new questions

Over the coming years, we will see wealth transferred, we will see teams created, and we will see more typhoons (meteorological, emotional, and financial). All these changes may cause some disruption, but they will also remind us what is important and what questions we should be asking.

My hope is that the perspectives I gained during my trip to Asia provide you with a few new questions you can ask clients – and yourself – to remember what is important.