A drop in the market is a great time to help clients with wealth transfers.

As reported earlier this month in WealthMangement.com, a Trust & Will survey found 40% of advisor clients would switch if the new advisor offered estate planning services. The survey also found that 70% of clients expected estate planning to be a part of their financial plans.
I bring this up because a drop in the market is a great time to help clients with wealth transfers because they can transfer those assets at a lower price. That means your clients can get more money out of their estates at a lower cost. What’s not to like?
As painful as this current market drawdown is, it’s likely temporary. I talked to a former tech executive who has almost his entire net worth wrapped up in his company’s stock. It was worth about $7 million when he left the company and reached as high as $80 million last year. Now, it’s down closer to $65 or $75 million, but he’s still way ahead.
“I lost $6 million today,” he lamented. I told him, “Not really, because you haven’t sold yet. Even better, we can transfer more of your highly appreciated stock out of your taxable estate than we could when the market was flying high.“ Essentially, I told him we could transfer a substantial amount of assets out of his estate for 70 cents on the dollar.
According to the aforementioned survey, many clients now view estate planning as a natural extension of financial advising. In fact, only 10% of respondents believed the two disciplines should remain separate. So, think about that when you’re losing sleep over diminished assets under management (AUM) fees in a declining market. Clients trust you. They’re asking you for something more than you’re currently delivering. But they might be tempted to move on if they don’t feel you’re listening to their concerns.
I know what you’re thinking. With the new administration in place, the generous estate tax exemption limit will likely extend beyond its year-end 2025 sunset date. Shouldn’t that mean only ultra-high-net-worth families are affected? I’ll answer it this way: A successful family may not have a taxable estate, but they likely still need help with their estate planning, legacy planning and charitable giving. I can’t urge you enough to get up to speed on the basics.

Real World Example

An advisor reached out to me the other day and said: “Randy. We’re dealing with a client worth $34 million who asked us which assets they should use to fund a donor-advised fund (DAF). What should we say?” C’mon, that’s Financial Planning 101, I thought to myself. Then, the advisor asked if their client could use the DAF to pay for their grandkid’s college tuition. I asked myself: How can you call yourself a consummate professional and not know something that basic? Unfortunately, this knowledge gap is more common than you might think.

If you’re not sure where to learn about estate planning and charitable giving basics, start developing relationships with people who are bona fide experts in their field. You can join a network of advanced planners and spend a little time learning the ropes. Most of the qualified pros are happy to help newcomers. You can join an estate planning council or a local planned giving group. If you’re a financial planner, stop going to meetings of other financial planners and instead go where the professionals you need like to gather.

Just don’t succumb to taking shortcuts or a “fake it till you make it” mentality.

According to the aforementioned Trust & Will survey, more than one-third of clients (37%) expect their advisor to educate them about estate planning basics; two in five (41%) want help with specific tasks like beneficiary designations and tax strategies; another third (33%) want proactive reminders to update their estate plan; 35% want a full suite of estate-planning services and 32% want their advisor to collaborate with estate-planning attorneys. By the way, this is a great way to establish referral relationships with attorneys. Imagine the value of bringing them clients for their estate planning practices!

Research tells us clients don’t see estate planning as separate from their financial lives—and they expect their financial advisor to help guide them through it. But that’s not what I’m seeing in the marketplace.

Too many advisors still don’t see the payoff from helping clients in ways that aren’t directly tied to AUM. When you tell someone how to designate the beneficiary on their individual retirement account, for instance, you don’t earn a direct fee. Still, you’re cementing your relationship with that client, and they’re more likely to stay with you, refer you and introduce to the next generation of their family. That’s the value of helping clients with things beyond investments and retirement.

A separate study by Cerulli Associates found that only one in five (20%) affluent clients choose to stay with their parents’ advisors. Cerulli reached that conclusion from a 2024 poll of nearly 800 investors under age 45 who had $100,000 or more investable assets or incomes greater than $125,000.
The Cerulli data also suggests that among affluent clients who are still with their parents’ advisors, roughly one in four will be looking elsewhere for advice in the next 12 months. Among those who currently have their own advisor, Cerulli said just 6% gave their parents’ advisor even the slightest consideration, and only 4% reported trying their parents’ advisors out for a while before moving on.

NextGen Relationships

From where I sit, families that stick with one advisor or team of advisors over the course of generations are likely to have more successful outcomes. That’s because those professionals become very familiar with the family’s values, distinct circumstances and investing and savings goals. Make it a priority to meet the next generation of your clients’ families and start building a relationship with them, too. That will help you and your firm keep those families under your guidance for multiple generations. By helping NextGen put the proper estate planning in place, you’ll know how to help them navigate wisely into the future.