Family Secrets: Does Your Family Understand Why You Chose Your Wealth Manager?

Whether you’re looking for a car mechanic or a dentist, you probably have your own unique criteria for choosing the professionals you hire. Maybe you want offices in a convenient location. A recommendation from a trusted friend. Or simply a like-minded person who seems to understand your needs best. As long as your professionals can prove to you they are doing the job right—and getting the results you want—then you really don’t have to explain your decisions to anyone else.

Hiring a wealth manager is different. One of the main reasons why people hire wealth managers is to ensure their loved ones are taken care of—today and in the future. Yet clients often fail to involve those same loved ones when it comes to discussing the family’s wealth plan. Common excuses include, “They aren’t interested in this stuff”, or, “Finance confuses them”. But excluding the family from the advisor relationship could be a big mistake.

Keeping Relationships Intact

Research shows that 70% of widows leave their advisors within a year of their husbands’ deaths.[1] An astonishing 86% of children of family-office clients plan to do the same, once their turn comes around.[2] These statistics suggests that while clients may like their advisors and understand where their long-term plans are going, their families don’t feel the same way. As a result, all of the plans, relationships and legacies that you’ve worked a lifetime to build could be tossed aside only a few short months after you are gone.

Continuity of service is a critical part of your financial plan. You naturally want your survivors and heirs to receive the same high level of trusted advice that you selected for yourself—without any disruptions that could make it harder to reach their goals.

What’s the answer? Communicate with your loved ones. Share the reasons why you chose to work with your wealth manager. Explain how your values are aligned, how your wealth manager gets paid, and the way your money is managed. You’ve built a wealth management relationship that works for you. Make sure your family knows how it works for them, too.

[1]Christie, Sherry and Mellan, Olivia. “Madame Ex: Advising ‘Gray Divorcees.’” Investment Advisor (October 2012).

[2] Rothstein Kass. “Changing of the Guard.” July 2009.