It's no surprise that most clients' kids "fire" the family's financial advisor once they control the money.
And that's usually the advisor's fault for not forming a relationship with the future decision makers when they had the chance. Only 3 percent of millionaire clients' children meet regularly with their parents' financial advisor, according to a recent survey by Versta Research for Wells Fargo's private bank. 78 percent of the 1,003 children surveyed had never met their parents' advisor.
It's not because they aren't interested. Most (88 percent) said they think regular meetings would be valuable.
Not to talk about the money. The majority (84 percent) want to "sustain and build on their family's legacy" and say they care more about philanthropy and "making the world a better place." Four in 10 want to have more say in their family's philanthropic strategies. Advisors can help form a relationship with those kids by bringing them into conversations that are explicitly about family values more than portfolio performance, said Katherine Dean, head of family dynamics at Wells Fargo Private Bank on Wednesday.
Some parents hesitate to discuss philanthropy and finances with their kids, worried they'll turn them into "entitled rich kids."
But that fear is overblown. "If it's communicated appropriately, they don't feel entitled, they feel a part of the family itself...It allows them to feel involved," said Christopher Pegg, senior vice president and senior Director of Planning at Wells Fargo Private Bank in California and Nevada.
The study surveyed children between the ages of 16 and 26 whose parents had an estimated net worth of at least $1 million. There were just under 10 million households with a net worth of at least $1 million in the U.S., according to a 2018 report by Spectrem Group, an investor research group focused on providing information to financial services firms.
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