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 Some firms are hiring advisers who might be retained by clients to
focus on their heirs - or by the heirs themselves. Firms that offer
the niche service also increase the likelihood of managing - and
preserving - the family's assets for another generation.
Targeting the wealthy's progeny could be lucrative. Baby boomers
will leave more than an estimated $30 trillion to younger
generations over the next 30 years, according to a study by
financial services firm Pershing LLC.
Advising clients' kids is not always easy: they often need more
education about budgeting and investments than older clients, and
tend to communicate during irregular hours.
Five years ago, adviser Jeff Seavey at SunTrust Private Wealth
Management, part of SunTrust Banks Inc, began schooling a younger
adviser to work with clients' children.
The adviser, Mary Lowell Downing, now 28, has brought in 15 new high
net worth clients in the last three years thanks to her appeal to
members of the younger generation. She now works with about 40
percent of the firm's clients, Seavey said.
Downing said she frequently gets late-night emails from clients with
links to house listings on real estate website Zillow.com and the
questions, "Do you like this?" and "Can I afford it?" - a sign of
fellow millenials' comfort with her.
Downing's clients are often preparing for major firsts, such as a
child or house.
By working with Seavey, Downing has a full understanding of her
clients and their parents' financial picture.
"[G]enerations think differently about values and lifestyles,"
Downing said. "The way I communicate is to try to frame everything
within the overall family legacy."
Similarly, at Wells Fargo & Co's ultra-high net worth branch, Abbott
Downing, a dedicated practice helps clients navigate complex,
long-term, family financial dilemmas. The Family Dynamics and
Education group last year worked with 25 percent of Abbott Downing
clients, a figure the team expects to grow this year, said its head
Arne Boudewyn.
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But sometimes, the near-term is more critical.
For example, Reid Hartsfield, a BB&T Wealth Management financial
planner in Jacksonville, Florida, had his hands full when advising a
client's son, who couldn't account for more than $179,000 in
expenses from his multi-million dollar budget.
Hartsfield, who frequently helps his wealthy clients' children,
examined six months of checking account statements and credit card
bills. He advised the son to put money in several separate checking
accounts, one for each bill. By managing his money in separate
baskets, the son had a clearer understanding of how much money he
had left for personal expenses.
Clients appreciate the help because for their kids, inheriting may
feel like winning the lottery.
"The percentage of lottery winners who are broke after five years is
staggering," Hartsfield said. "Parents don't want their kids to be
that statistic."
(Reporting By Elizabeth Dilts; Editing by Suzanne Barlyn and
Christian Plumb)
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