Communicate with your clients about their legacy

When you’re a financial advisor, you can deepen your relationship with clients when you learn more about their values and the legacy they’d like to leave. That’s one of the reasons Kathleen Burns Kingsbury encourages you to conduct legacy conversations with your clients. She suggests a list of questions in her book, Breaking Money Silence: How to Shatter Money Taboos, Talk Openly about Finances, and Live a Richer Life. Her list is reproduced with permission at the bottom of this blog post. (By the way, if you enjoy this post, check out Kingsbury’s presentation to the NAPFA Fall Conference in Orlando later this month. I’m looking forward to it.)

Advisors, start with yourselves!

In an interview conducted via email, Kingsbury explained why she suggests that advisors start by answering these legacy questions for themselves.

Advisors are people too! Just like their clients, there can be a tendency to avoid talking about their legacy plans with loved ones.  Answering these questions is a great way for advisors to start this dialogue with their own families, as well as gain some insight into what the experience of answering these inquiries may be like for their clients.

One area that may be particularly helpful for advisors are the questions related to their business and their plans for their practice once they retire. If an advisor has not done any succession planning, then it may be challenging for them to hold their clients accountable to do the same.  Anyone who has seen me speak or read my previous books and articles, knows that I firmly believe that the best advisors are the ones who are emotionally intelligent and have insight into both their strengths as well as potentially blind spots when it some to financial communication.

She also noted that if advisors personally experience the value of completing the questionnaire, they’re more likely to present it to clients in a compelling way.

Introducing the questions to your clients

Burns Kingsbury suggests introducing this questionnaire to your clients as a tool to assist them in preparing to discuss their legacy plans with their children. She said:

As many of the clients will be couples, the idea is for both partners to answer the questions separately, then for the advisor to facilitate a dialogue between the partners about shared values, intentions, and ideas around end-of-life care and preparing their heirs to receive wealth. This provides the couple (and the advisor) with a structured way to begin their journey of communicating important emotional and financial data to the next generation. Once the couple has agreed or found common ground in some or all of these areas, they will feel more prepared to communicate these values and their intentions to their children and/or grandchildren.

The questionnaire can be a take-home exercise for your clients—I think that’s how I’d prefer to fill it out—or you can ask the questions in person.

Success stories

I was intrigued that the legacy question list starts with success stories. Kingsbury said,

Advisors find that when they ask their clients to share their success story with their children, that some people are resistant at first to do so. This tends to be a generational phenomenon with people from the traditional and later boomer generations feeling that sharing their financial successes is a form of bragging. But when the advisor explains that telling the next generation your success story is a great way to identify and share your core values, they tend to be more open to do so.

Pushback and pitfalls

I wondered if clients ever resist answering the questionnaire. Kingsbury said,

The only pushback comes from clients who are very resistant to thinking about their mortality. If this occurs, then the advisor can simply focus on the question around the client’s success story first, or give the questions as a take-home assignment. Sometimes it takes clients a while to see the value of these conversations but with gentle persistence over time, most find this process not only helpful but also rewarding. Families who have engaged in this type of money talk are often very glad they have done so, especially once a parent becomes ill or dies.

I also asked if there are pitfalls advisors should avoid. Kingsbury said,

With any client inquiry, it is important for advisors to be focused on listening to the client’s responses, and asking clarifying questions to fully understand their client’s intended responses. It is vital that you suspend any judgments during this exercise. There are not right or wrong answers to these questions, just the one’s your clients provide.

I would also encourage advisors to refrain from self-disclosure unless a client asks for this information directly. For some people, knowing more about the advisor’s mindset is useful, but for most it can be a way of deflecting or trying to find out data to provide the “right” answer to please the advisor. Remember that these are not simple inquiries so if the client can only answer a few of the questions initially, that is okay. The goal of this exercise is to help facilitate meaningful reflection and conversation over the course of time, not to just fill in the blanks.

Benefits of legacy conversations

Wrapping up, Kingsbury described what she sees as the benefits of advisors conducting legacy conversations.

The more an advisor can learn about a client’s values and feelings about their wealth and legacy, the better. This helps the professional foster trust, and shows the clients that he or she cares about more than just making money off their investments. Conversations about these important aspects of life and aging will demonstrate to your new and existing clients that you want to help them in a holistic way (a very female-friendly practice) and differentiate your services from other more transaction-oriented advisors and fintech offerings.

These questions and the accompanying conversation are great to use to prepare for or as part of a family meeting. This helps the advisor begin to develop a relationship with their clients’ children. Overall this type of money talk is good for the clients and great for the advisor’s business. And most importantly, it helps advisors empower their clients to break money silence in their lives. Ultimately that is the goal of my new book and more work going forward.

Legacy questions

Reproduced with permission from Kathleen Burns Kingsbury, Breaking Money Silence: How to Shatter Money Taboos, Talk Openly about Finances, and Live a Richer Life

  1. Your Success Story

a. What is your personal or family success story, and how does this story express your core values?

b. What are the financial lessons embedded in this story?

c. What other family stories may be helpful to communicate to your family? These may include successes, but also mistakes and lessons learned.

2. Your Core Values

a. What are the three most important personal or family values you want to pass down to the next generation?

b. What makes these values important to you?

c. What stories or examples from your own life may help communicate these values to your heirs?

3. Your Charitable Giving

a. How do you view philanthropy and charitable giving as part of your legacy?

b. What charitable organizations do you currently give to and what organizations might you include in your estate plan?

c. What type of gifts (include financial and non-financial) would you like to give the next generation and when do you plan to gift them?

4. Your Business (for business owners only)

a. Do you have a business succession plan? If not, what is your rationale for not having one? If you do have one, what did you learn in the process of developing it?

b. Who will inherit the business, or will you sell your business? Is there a buy-sell agreement in place and if not, when will that be drafted?

c. Have you communicated your intentions to your family and key stakeholders? Why or why not?

5. Your Estate Plan

a. Do you have a will and/or an estate plan? If so, has it been reviewed in the last year? If not, when do you plan to draft one?

b. Have you shared your end-of-life wishes and health directives with the next generation?

c. If not, when do you plan to have this conversation? Who can you enlist to help facilitate this dialogue?

Disclosure: If you click on an Amazon link in this post and then buy something, I will receive a small commission. I only link to books in which I find some value for my blog’s readers.