As high-net-worth clients near retirement age, they often seek guidance on aligning wealth management with their retirement goals. That includes guidance around estate planning, wealth transfer, and tax mitigation. 

While financial advisors have the capabilities to manage investments and assist with retirement planning, their practice scope does not typically extend to elements beyond financial assets such as healthcare decisions and property distribution. What’s more, estate planning frequently involves intricate family dynamics, complex assets, and unique circumstances that require specialized knowledge that fall outside most financial advisors’ comfort zone.

Expanding Your Practice Value with Estate Planning

By not including estate planning services as part of their practice offerings, financial advisors are hindering themselves in attracting and retaining HNW clients. Rather than sending HNW clients to an outside estate planning attorney, financial advisors are better positioned to retain these clients by partnering with a wealth management team that has expertise in estate planning and related solutions. The following hypothetical client scenario illustrates the advantages of this partnership for the client as well as the financial advisor.

The Smiths — Patrick, age 51, and his wife Susan, age 50 — have combined assets of $17M, including their home, inheritance, investment portfolio, real estate holdings, private equity, and retirement plan. Engaged in the advisory process, the Smiths are curious and asks questions to better understand their options. They’re interested in having their financial advisor, Bob, evaluate their forward-looking wealth scenarios and determine if now is the right time to implement an estate plan.

Complicating the request, the Smiths have not yet met the $26 million threshold that triggers the federal estate tax exemption limit for married couples, allowing them to transfer up to a certain amount of wealth without being subject to federal estate taxes upon their death. While he’s not an estate attorney and has no experience with estate planning for HNW clients, Bob wants to meet his clients’ needs and retain the business. That’s why Bob partners with a wealth management team who has estate planning expertise.

Partnering with Estate Planning Experts

Rather than refer Patrick and Susan to an outside estate planning attorney and potentially lose them as a client, Bob informs the Smiths that he partners with a wealth management firm whose team includes an experienced estate planning attorney.  

Bob offers to set up a meeting with himself, the Smiths, and the partnering estate planning attorney. The Smiths agree. During this initial meeting, the team delves into the clients’ goals, needs, and values including:

• Desired future-state outcome at retirement

• Desired future-state outcome upon death

• Charitable mindset

• Children’s legacy and inheritance

• Income tax sensitivity level

• Cash flow needs during retirement years

• Asset and risk management objectives

• Complexity factors

• Healthcare intentions

• Current investments, assets, and liabilities

By the end of the meeting, Bob and his partnering team have captured a complete picture of the Smiths’ preferences, desired outcomes, financial purpose statements, and risk tolerances. 

Next Steps: Building, Sharing, and Comparing Scenarios

Over the next two weeks, the partnering estate planning attorney shows Bob three different strategies customized for the Smiths’ estate planning, wealth transfer, and tax mitigation. Bob reviews the strategies and presents two to the Smiths in a follow-up meeting, also attended by the estate planning attorney. The Smiths ask many questions about the advantages and disadvantages of each strategy, and seem to understand most of what Bob proposes. But naturally, they still have questions.

Over the next three weeks, the estate planning attorney and Bob take into consideration the Smiths’ questions and input; review the strategies, which encompass setting up trusts, insurance, gifting, and tax mitigation; and present revised strategies with additional information to the Smiths in a follow up meeting.

The Smiths take a few weeks to consider the additional information and ask Bob for another meeting to discuss further. During this meeting, Bob and the estate planning attorney present life-case analysis of the different strategies using the AI-enabled platform. Bob and the partner team evaluate a few additional tax mitigation and wealth transfer strategies on the spot, showing the Smiths different wealth implications for each. The Smiths leave the meeting confident in Bob and his partners.

Full Confidence Leads to Full Engagement for Wealth Estate Plan

Reassured in Bob and his partner’s capabilities, the Smiths engage him for their full wealth estate plan. Unsure of their own attorney’s experience drafting the necessary legal documents, the Smiths ask Bob for additional guidance. Bob extends the services of a trusted law firm, included in his partner’s vetted network, to draft the legal documents. He sets up a meeting with a qualified attorney from the firm.

After the meeting, the Smiths confidently hire the attorney to complete the legal documents. Over the next several years, the Smiths add $3M to their investment portfolio, ask Bob and his partner to make more changes to their estate plan, and remain Bob’s long-term client.

Sandro Wealth Management: The Financial Advisor’s Estate Planning Partner

At Sandro Wealth Management, we empower financial advisors to meet the comprehensive needs of HNW clients at every phase of life. For clients considering estate planning, we collaborate with advisors to provide complete guidance and services that allow them to retain their clients and extend lifetime client value. With Sandro Wealth as part of their team, financial advisors have the confidence and capacity to:

• Offer HNW clients the expertise of a senior-level estate planning attorney.

• Present multiple scenarios and strategies and ensure clients understand the advantages and disadvantages of each.

• Promptly respond to clients’ questions and input, and provide high-touch service.

• Connect clients to a qualified attorney to draw up the necessary legal documents.

• Provide strategies for wealth transfer, trust planning, charitable giving, and tax mitigation.

• Evolve and adapt the clients’ wealth estate plan as their needs, goals, priorities, and life circumstances change.

Extend Your Financial Advisory Practice with Estate Planning

Contact Sandro Wealth Management to discuss strategies for integrating estate planning in your practice.