Marketing & Client Acquisition
Webinar on demand: Bring the power of multigenerational growth to your practice

CE credit: 1 hr., CFP and CIMA



Chris Gies: Hello, and welcome to the PracticeLab webinar series. I'm your host, Chris Gies, director of advisor practice management at Capital Group. I want to thank all of you for joining us today. Today's session is focused on how to create bridges, bonds and, ultimately, business with the next generation through multigenerational strategies. So our goal over the next hour is to show you how you can expand your practice to meet the ever-changing demographic shifts and continue to help clients preserve generational wealth by implementing just a few simple and, importantly, scalable ideas. We have Leslie Geller back with us today to share insights and also actionable ideas that work.

Before I introduce them, let me cover a couple of housekeeping details. Continuing education credit is available for both CFP and for CIMA designations. You're going to see that on the screen. To get credit, you have to stay to the end of the event, at least 50 minutes, and complete a short quiz. I promise it's not difficult as long as you're paying attention. You can find that quiz in the additional resources portion of your screen where you'll find today's slides, a checklist, and a PracticeLab article that'll be covered in depth later in today's call.

Also, you're going to see a Q&A window. We love getting your questions and comments, and we'll try to answer as many as we can throughout the event, so keep them coming. Type them into that Q&A window anytime during the course of the event. I may also check in with you on a few questions. In fact, I plan to during the event. So I would very much appreciate your participation there. If you do end up with any technical problems, also let us know in that same Q&A window.

And with that, let me introduce our speaker. Leslie Geller is a senior wealth strategist here at Capital. She has 14 years’ industry experience. She's been with us for a little over three years. Prior to joining us, Leslie was a tax and estate attorney at a number of prominent LA law firms. She received her master's in taxation from the New York University School of Law, her law degree from Boston College, and a bachelor's degree from Washington and Lee University. Leslie also resides in Los Angeles. Leslie, welcome and thank you for joining us today.

Chris Gies: Let's jump in. It feels like we've seen headlines like those on this slide about millennials and wealth management for years, and it doesn't look like it's letting up. I have a sense for why that is, but Leslie, I'd love to get your take on why you think there's so much for us and continue [to be] for us on this topic. And Leslie, maybe I could start with you.

Leslie Geller: Yeah. So, it was funny, this morning I was looking at this slide. And first of all, thank you everyone for joining us today. This is such an important topic, and I love speaking about it. So I was looking at this slide this morning, and I was specifically noticing the dates of the headlines, right? And the earliest one is from 2014. But, you know, in my experience it's gone back further than that, right? I think this has been a huge topic on the minds of advisors, investors, the press for a really long time, and it will continue to be. And I think there's a few reasons for that.

I think, first of all, we're seeing a lot of advisors actively engaging with the next generation, right?. So there's a lot of people doing it well. The people that aren't doing it yet are seeing the results and wanting to mimic it. So this is still a big topic for

advisors when they're looking to build their business or make their practice better. I think we're also watching that wealth shift actually start to take place, right? So in the last 10, 15 years, maybe it's just been the discussion of next-gen and specifically millennials starting to receive that big transition of wealth, whether it's from them earning it or inheriting it. But now we're actually seeing that start to happen.

And I think the other reason that we're still seeing this in the headlines, it's still a major topic of discussion, is that it's hard to engage with next-gen and specifically millennials. And I think the primary reason for that, especially right now, is that it is a moving target, right? Millennials are growing up. They're in a very different life stage than they were in 2014, right, even in 2018. And the millennial generation spans 15 years, right? So right now, millennials are between the ages of 26 and 41. So I'm 41. I'm actually what they call a geriatric millennial, which I think they need to rebrand. I don't like that. But 26 to 41. Think about what happened in your own life from the ages of 26 to 41. That is a huge transition phase in life, right?

Maybe you're finishing up grad school, buying your first home, getting married, having kids. I even think about where I was eight years ago when that 2014 headline came out. I have three daughters now. My oldest is 10. In 2014, I had one daughter. We were renting a little house in Venice, California. Now I have a big family, a big mortgage. My expectations and outlook when it comes to my financial life has completely shifted in eight years. So take that and magnify it in terms of the entire generation. It is hard to keep up with this generation and how they view finances, not to mention the differences within that demographic itself.

Chris Gies: Leslie, I love the geriatric millennial comment. I would've put you more in the middle of the millennial stage.

Leslie Geller: Well, thank you.

Chris Gies: I know we'll be sharing more-

Leslie Geller: I appreciate that.

Chris Gies: (laughs) You're welcome. I know we're going to be sharing more compelling facts to drive those points you just made home. But talk a little bit about how this resonates with you, and importantly what are you seeing?

Leslie Geller: There is definitely a lot of energy out there around how to connect with next generation. It's important to note that next generation is not just millennials, it's the next generation who's actually inheriting wealth. And so for the silent generation, that group is going to be the boomers. For the back end of the baby boomers, that's going to be Gen X. And for the front end of the baby boomers, that'll be millennials today. It'll be something else in the future. So, it's not this monolithic thing. There's a lot of variability within that. And there has been for some time.

Advisors note this is something we need to address, but it doesn't necessarily have a meaningful near-term payoff for them, or at least that's how they view it sometimes. Why don't they address it? Well, it's not always easy to implement. They’re not sure how to structure and what to offer. Doing too much will kill the capacity of your business. Lack of scale on a team can make resourcing the role difficult or even cost-prohibitive. And then I mention at the outset, this lack of a near-term payoff for many, it leads to a wait-and-see approach. The challenge with that is that millennials aren't standing still. They're moving on. And by the time someone moves from 26 to 41, their life is in a very different place, and they've probably established those relationships.

So there's really no hard-and-fast rule how to do this. And I know we'll talk later about some of the specific things you can focus on. But initially, it's just about outreach and establishing a connection and beginning communication. It shouldn't be rushed because relationships can't be rushed. You have to build trust. But advisors need to start now. We looked at some research recently by Spectrum Marketing Insights earlier this year, and we found that less than one-third of millennials or Gen Ys are planning on remaining with their parents' advisor. Less than one-third. Put it another way: Two-thirds of an advisor's book could be at risk as a result of generational wealth transfer. And what's really sad about that is all the great work that advisors have done with the client to structure their wealth, to fund education plans, to implement gifting strategies. All of that is for naught from a business standpoint if you don't keep the assets on the transition to the next generation.

Chris Gies: As we go to this next slide, I think there's even more reasons that support exactly what you just talked about. And, bear with me, let me go through a series of what I think are pretty meaningful data points. As I finish, I want to ask you, Leslie, to help translate what they might mean to advisors, or further translate what they might mean to advisors. First of all, we know that millennials surpass Gen X as the largest working adult population in 2016 and boomers as the largest generation overall in 2019. More importantly, millennials like Leslie are starting to reach their peak earning years and have filled in nicely as the third generation of wealth. And their share will continue to grow as boomers draw down and transfer their wealth.

This chart to me is the drop-the-mic chart, though. Oftentimes, when it comes to millennials, we assume the majority of their wealth is going to come from inheritance, and it kind of takes a sense of urgency away from the advisor in thinking about working with them. But this chart shows otherwise. CB Insights projects that organic growth from savings and investing will compromise the majority of millennials’ financial assets, which will then grow even more through inheritance and wealth transfer. And while this chart only goes through 2030, Cerulli projects millennials will capture 40%, 40% of the nearly $73 trillion in inheritance transfer through 2045. OK, I apologize. That was a lot of stats. How meaningful are these data points for advisors?

Leslie Geller: They're really meaningful when you think about it on the longer term. And just to rewind a little bit, one of the reasons for this is that, while the great wealth transfer has begun, we’re still in the really early stages of it. So if you look out over the next 25 years, we talked about the fact that $82 trillion will be moving across generations. You have $72 on the slide because $10 trillion or so of that is going to go directly to endowments, charities, foundations, things like that, and not to the beneficiary. So the $72 is the right number that'll be transferring to individuals.

What this doesn't give you is timing though, right? So when you look at the trend of those assets, millennials are certainly capturing some of those assets. But they're not expected to exceed what's going to Gen X until 2039.

So, when you think about that context, it makes total sense here that savings and investment, the bulk of those assets are going to come most likely from the work that they do. And that's why it's so critical. They'll be in the late 50s, and so it makes absolute sense from that standpoint. However, if you wait until then to initiate, you're just going to be way too late.

And want to make one more point. Millennials are probably the most well-informed consumers in history, much more so than prior generations. Why? The technology, right? Most of us have grown up with technology in our hands. Whether it started with the gaming and evolved into other things, we are completely comfortable with it. And we leverage it in everything that we do. And that, by the way, is not to say that we go to Carmax to go find the cheapest car we can buy. We're interested in value. We're about experiences. We're looking for things that align with what we feel and believe as an individual. We will pay for those things. It's just not a cost-oriented conversation. Case in point: Affluent millennial investors are more than twice as likely to have a financial advisor, with actually two-thirds of us having trust in financial advisors. So that's a really great starting point to build off of.

Chris Gies: That makes so much sense. And I can tell you, speaking from experience, that that move from 41 to 58, it happens like that. Leslie, what do these stats mean to you?

Leslie Geller: It's going to be awhile before those millennial inheritors actually get control of that wealth. And I think maybe that's one of the reasons, too, that this engagement with millennials, actual engagement with millennials, is still kind of aspirational for some advisors, is that it seems far away. But there is this whole other group of millennials in their mid to late 30s, early 40s, who are reaching their peak earning years, who are making a lot of money and looking for guidance on how to invest and plan, right?

And I think this slide speaks to really the lack of uniformity among that millennial, the members of that millennial demographic, right? So you have those second-, third-, fourth-generation inheritors. You also have those hard-working, self-made millennials who are often in their 30s, early 40s, at this point. And then within those two groups, you have that age span of 15 years, right? 26 to 41. That is a massive age span, right? And so, if you're talking about the inheritor who's 26 versus the inheritor who's 40, really different approach there. Same for that successful startup entrepreneur who's 28 versus that person who's a corporate executive who's 38, has three kids and lives in the middle of the country. Very, very different experiences, and personalities, and needs from a financial perspective within that one demographic. It's not one monolithic thing. And I think all generations have that variability. But I think it's really pronounced right now, especially within this financial and advisory industry. All of these people, all of these millennials that we're talking about, these different types, they all will need a financial advisor, or most of them will need a financial advisor. But how we engage with them, the support we provide, how we bring them in varies drastically because who they are varies drastically, not only in just age, but in their values and life experiences.

Chris Gies: So what I'm taking away from all this is there's a lot of opportunity, a lot of diverse opportunity for advisors to expand their practice to this younger cohort of investors. And that's a great point, Leslie, about paying attention to the individual dynamics. There truly is no one-size-fits-all. Another factor to consider is how a broader client base can influence the advisor's firm's value. Can you talk a little bit more about this point as an expert on it and its implications?

Leslie Geller: Sure. When you look to value a business, think about the big picture. Current revenues, product mix and profitability are really the easy items. But if you think about it, they're mostly backwards looking. And what I mean by that is that fees and revenues are a trailing indicator, right? They occur because of onboarding new clients, gathering additional assets from existing clients. And finally, they're tied to the nature of the products being used by the advisor, and that frames out your current revenue and profitability picture.

But buyers today, like millennials, are a much more informed bunch. They're not just buying today's revenues. They want to think about what the future growth prospects of the business are. Is this a business that's in long-term liquidation, meaning a book of older clients who are spending down assets? The average business will lose plus or minus 3% a year in AUM just from death, divorce, consumption of assets and, of course, the loss of relationships to other advisors.

And the second key question that buyers want answers to is whether this business, will it continue to flourish and grow? And a big portion of that will be pointed around how well the advisor is doing in building an intergenerational business. You know, are they connecting to the next generation of investors that'll be assuming control of those assets? And so, really informed buyers are looking through the current client list to see: What is the client list overall look like? What is the average age of the client list? How is it distributed across the ages? What is the asset distribution? Can you see multigenerational relationships within the book? Those are the kinds of things now that are taking a lot more time and energy as acquirers are looking to buy businesses.

So in today's world, if you want to get a premium valuation, you need to show that you're able to grow not just as a result of the market. We've been very fortunate, these last 12 years so, that the market has really driven a lot of that. But you need to show that you can go through client acquisition, through retention, and next-gen is absolutely core to doing that well.

Chris Gies: Based on your comment, it's clear that if you want a thriving practice, not just today, but five, 10, 20-plus years in the future, next-gen as a strategy really can't wait.

Chris Gies: So now, let's shift to what's working for high net worth practices, and that clearly points to leveraging existing client relationships and the rapid adoption of this strategy. You can see the jump from 51% to 71% in high net worth practitioners having a practice relationship with their clients’ children over the three years from 2018 to 2021. And this shows intent for sure. Leslie, how does this reflect your actual experience in the field working with advisors in a high net worth area?

Leslie Geller: Yeah. So I definitely see this reflected in my conversations in the field. And I'd be so interested to know or understand the effect that the last couple of years has had on some of this engagement. So many people being at home, being with families, how that's impacted the acceleration of this adoption, of this multigenerational engagement. I'm sure there's something there, but really interesting how, kind of, those world or current events drive strategies even for advisors in this type of environment.

So I see this in the field every day. I think the advisors that were already doing it are making more of a point to do it deliberately and in a focused, systematic way. There's intent. We've used that word a few times. There's real intent behind it. And those that haven't been doing it are very much aware of the fact that they need to start. They're asking questions. They are starting to integrate this into their business. This is why we talk about it all the time. And I think there's a few reasons that we're seeing this happen. First of all, and I alluded to this earlier, we're actually starting to see that wealth shift, whether it's at higher generation, so from the silent generation, to boomers, or Gen X, or actually to that millennial generation at this point. So we're actually seeing that shift of wealth, so it's no longer a forward-looking endeavor. There is actual real benefit to engaging with these younger generations, because they have real money.

I think advisors have also realized that this is not only a way to keep assets and hold onto assets across those generational transitions, but it's the most efficient way to organically grow their business. And I talk about this with women advisors all the time. We're always looking for ways to be more efficient, because we've got so many different things going on. And one of those things that we really try to coach them on being more efficient with is business development. And how do you meet new clients, bring new clients in when you're already so stretched for time? This is one of the best ways. If you're involving the whole family, making connections to younger generations, or even older generations, other branches, partners in a business, you are going to organically grow your business without doing anything that is only business development, right? Those lunches or coffees. You're not doing that. You're using your work and what you're doing already to build that business. There's tremendous value in there, as we all look for more ways to be more efficient from a time perspective.

Then I think the third reason is that advisors are realizing how well-positioned they are to help their clients in this way. So you see some of these strategies. Ask clients and their spouses to get involved. Involve the next generation at the start of the client relationship. Use irrevocable trust, gifting, wealth transfer. Hold financial information sessions with clients. Who else is going to do this? Not the estate planning attorney. Not the CPA. They're all restricted by the billable hour. Their relationships with clients are very transactional. The advisor is the one who has the relationship, that knowledge of personalities, family dynamics, assets, what's going on, how things will transition. The advisor is the one who has that skillset to really, really provide support in this way.

So up here we have a few strategies, or four different ways that advisors that are doing it well are doing this. I think the important takeaway is that you can't do all of them with everyone. I think the advisors that are doing this the best are the ones that are using their knowledge of the clients, the knowledge of the family dynamics, to pick one, right? Pick one or two for now and engage in that way, as opposed to trying to boil the ocean and do it all at once.

Chris Gies: You know, Leslie, whenever I hear you talk about those strategies, it makes me think, “This makes so much sense.” And I'm thinking everyone on the call with us can appreciate how scalable and how important, how important and how impactful it really is. I'm curious. I promised you at the outset of the call that I wanted to ask a couple of questions of all of you who are on the call with us. I'm curious how many of you are actively employing these strategies or strategies like these as part of a multigenerational growth plan. Can you input in the questions window which ones you might be using? I know folks on the call ready to take notes on the ideas they can apply in their practice. But I'd love to see what you all are actually doing today. So, I'll pause for a second, and let's see what actually comes in. Leslie, one of the questions that folks, and maybe you can react to this, would love to hear more about is, what an agenda might look like for a conversation with clients and their children, and sort of what age do you start involving children in these conversations?

Leslie Geller: Yeah, I think, you know, we see so much family meeting and family wealth conversations content out there that provides a sort of one-size-fits-all approach to these conversations. And I think if we've learned anything, or I've learned anything, over the last several years, is that it certainly isn't a one-size-fits-all conversation. And what makes sense for one family as far as an agenda, or as far as what is an age-appropriate time to bring this up, it completely depends on the family that you're dealing with. That's a very lawyer hedgy answer, but this is one of those areas. And it goes back to my answer to your prior question where advisor's knowledge of the family dynamics and the relationships among the different individuals can really inform what that agenda is going to look like.

So how comfortable is grandpa in revealing what his assets are, how much they're worth, and who they go to? Who's going to be in charge? How competent are the kids in generation two? Are they totally self-sufficient and productive members of society, or are they quote, unquote, "trust fund kids"? A lot of these conversations are going to depend on the specific family that you're dealing with right now. And I know we'll get into that a little bit more when we talk about some of these specific things that advisors are doing to build that multigenerational practice.

Chris Gies: Thanks, Leslie. Awesome. Great answer. I'll give you a couple more that I'm seeing in the questions box. One of the advisors on the call says they use gifting. Another one, interestingly, says that most, almost all, of their older clients don't want to involve children, which I think is pretty interesting. That may be a great place for us to sort of move to the next slide: three strategies to build multigenerational growth at scale. Would you take a minute and walk us through those three strategies?

Leslie Geller: Building a bridge to the next generation through family wealth briefings, a great way to take an objective look at where the family sits. Now clearly, you just mentioned that one advisor or a few advisors had said their clients are uncomfortable with the discussion of wealth with the next-gen. So that's something you’ve got to establish upfront. But we're seeing that more and more families realize that the responsibilities of wealth are significant, and that they have to ready their kids. So having those conversations and helping the family walk along that path is really key.

Number two, creating a business connection to the client's children through strategic wealth transfer, things like, and you heard it in some of the comments, gifting, right. The annual gift, which is the simplest thing you can do from an estate planning perspective, can go a long way in building rapport and trust. And it's not a lot of money, which hopefully means that the parents will be eager, or the grandparents who are gifting, to allow the children to put some form and function around how they invest. And that allows them to take on accountability understanding. And as an advisor, demonstrating that you're playing an integral role in helping the family think through wealth structuring options, this is an opportunity to strengthen that connectivity and work with that young millennial or that next-gen investor as they develop on their point of view and their passions.

And then finally, early financial guidance. This is probably the easiest one to implement and actually may have the most impact early on, because it's all about the next generation and the individual, establishing trust through financial guidance, simple stuff like helping them understand saving and budgeting plans, understanding credit. For many of us, we saw the credit card companies on campus offering you a credit card. All of a sudden, you had financial independence from your parents. The problem is you had financial independence from your parents, right? You had to make the payment or at least go in and explain why you spent the money to get some funding. So, companies were taking advantage of that. You can come in and play a great role in helping that individual really understand those basic things: saving, budgeting, credit, debt, et cetera. That's really powerful stuff, and that's going to create connectivity. And that's going to build trust that will allow you to then transition into the more meaty issues over time.

Chris Gies: I remember those credit card conversations with my dad. Thanks for reminding me.

Chris Gies: That feels to me like a really effective and thus valuable framework. I understand that you've been taking this idea of the family wealth briefing on the road. Can you walk us through the key aspects of both what it is and how to do it well?

Leslie Geller: Yeah. So, in the slide we're going to see next, (laughs) ... This one is one of my favorites. So it's on the left: Bridge the communication gap, the crossed signals.

Leslie Geller: . So it shows what parents think the lessons they've imparted, and then the lessons that children think their parents have imparted. And I would love to, in 10 years, ask my daughters that question, what I think I've been doing over the last however many years, and what they actually have taken away from that. I bet there's a disconnect in every area, but this is one area where we can actually do something about that communication gap. And then the stat on the right, that 77% of advisors say the hardest part of estate planning is navigating interfamily dynamics. And I get that, and I hear that, and that is what I see. And so when we set out to support advisors in this multigenerational engagement, we knew that a family meeting or that type of communication would be part of the conversation, but we very deliberately wanted to approach it in a less intimidating and more concrete way.

So we came up with this thought of, why don't instead of calling it a family meeting, which sounds scary, right? It implies that everyone has to be on the same page, moving in the same direction. We thought, "Let's call it a family wealth briefing.” And instead of focusing on the esoteric pieces of what's the family legacy or the family motto or how we want to see ourselves in 30 years, or what money means to us, let's focus on the concrete. Let's focus on communication, transparency and managing expectations. So let's ensure through this family wealth briefing that everyone in the family, to the extent that the matriarch and patriarch are comfortable with them knowing this, that everybody understands what there is, so what the assets are, where those assets are going and when, and who's in charge, right?

All of those other things that are part of that family financial legacy, wealth transfer discussion are great and important for some families, but if you don't address these basics — what's going to happen to everything, when it's going to happen, and who's going to be in charge — it's just going to be the giant elephant in the room, right? So communication, transparency and managing expectations. Those are the three key parts of this family wealth briefing. And that's where advisors come in. They can play a huge role in facilitating these family wealth briefings for families from the mass affluent straight up to the ultra-high net worth.

Chris Gies: And I can see why that facilitation is so critical, is so valuable, would move the family through the discussion in a really productive way. So Leslie, when I went through the deck in preparing for our conversation today, and I got to the next slide, the slide on the financial professional’s role. Talk about why roles are important and why the advisor needs to keep them, why it's so important to keep them in mind in a family wealth briefing context.

Leslie Geller: Yeah. So, you know, I think the more important part of this slide is the gray part. The role is not family member, psychologist, mediator, decision-maker, right? I think it's an area where it's really easy to cross the line, where it's really easy to become invested in a decision, or to want a certain family member to quote, unquote "win" in a debate with the other, right? To try to solve everybody's problems on your own. But that is not the advisor's role. And I think, from my experience, advisors that I've spoken to about this actually take great comfort in hearing that this is not their role. There is a very clear line as far as the role that they should play and the role that they shouldn't play. So having this distinction, I think, makes acting as the facilitator of these family wealth briefings much less intimidating, because you know you're not going to, you know, step into the tricky stuff if you follow this. And it keeps you in Switzerland mode. You're everybody's friend; you're everybody's helper, everybody's supporter. And so, I think if you're going to focus on one piece here, it's the role is not, because I have seen advisors get into trouble when they crossed that line.

Leslie Geller: It's not always easy, but you’re not the family psychologist. And most importantly, you're not the decision-maker. You've got to facilitate that. I think acting like Switzerland is really key. And it’s a challenging area because you can take two families. I was just at a conference with several ultra-high net worth advisors. And one of them was talking about the challenge of two families that they work with, both about the same level, several hundred million dollars in assets. In one case, the children are completely aware of everything, where all the money is. The father has done a great job in bringing in the kids. They're involved in every conversation. His decision was to bring them in right away. They don't have any ownership of the capital, but they know where it is, what it is, how it's being managed, and dad is ensuring that they're getting up to speed and continuing adding a little bit more responsibility along the way. Juxtapose that against another family who's just had a liquidity event. There's no knowledge, right? They don't live in a big house. They don't drive fancy cars. They don't have a private jet, but they have several hundred million dollars, and the children know nothing. And the parents want it that way for the time being.

So you really have to gear it off of that, because I know there's, some people raising the concern of the moral hazard. That if the Fed put, as we call it in our business, you don't want to create affluenza by letting on too early that there's this pile of money there, that the kids might not have to go out and eke out their own living. You're seeing more and more parents though putting criteria and boundaries and things like that around achievement before they will the transfer the money.

So I think those are some of the things you want to think about when you're looking at this. But definitely what not to do are the areas where you want to be really, really thoughtful and really diligent.

Chris Gies: Yeah. I mean, Leslie’s points, your color around creating boundaries so that the advisor can maintain a proper professional relationship and allow them to facilitate even the tough topics around these conversations, these family wealth briefing conversations. Really important. But let's stay on the topic for another minute or two. Leslie, I've heard you talk a lot about the importance of a family governance model. Can you share what it is and, and, and why you feel it's important, how it can help?


Leslie Geller: Yeah. So family governance, similar to this idea of a family meeting, family governance has a different meaning depending on the context that you're using it, depending on the family you're talking to. But in all of our research and in all of our efforts to support advisors in this journey, we've really determined that there are five foundational elements to family governance. And every family will use those five elements or focus on these five elements differently, and different weights at different times. But they are all present in every family governance model. And so, we were talking earlier about, or answering that question, an agenda for a family meeting, right?

This is a great framework for setting that agenda for a family wealth briefing. So whether it's one meeting, whether it's a series of six meetings to discuss each of these things, plus then a closing meeting, right? These should be part of the agenda in this family governance or family briefing journey. So, control, who's in charge? Process, how are decisions made and communicated? Education. So not just giving the younger generation general financial education, but ensuring that everybody understands what is happening with the family wealth. How is everyone in the family prepared for future tax and estate issues? That's planning. And then finally that actual transition.

And you know, when I'm asked by advisors, “I have this client, and I can't get them to talk about this.” They don't want to involve their children and grandchildren. They really want to keep the money or the degree to which they are wealthy a secret for as long as possible. I really try to drive home the point that these transitions are going to happen even if you stick your head in the sand, right? These transitions are going to happen. Death is going to happen, incapacity, money is going to move down generations. And you can choose to prepare everyone or not, right? You can choose to do the tax planning or not, but it's a zero-sum game, and especially around taxes.

I love this idea that, you know, people don't do the planning because they can't make decisions. They don't want to deal with family dynamics. But it really is a zero-sum game, right? So either your money goes to the people that you want it to go to, your assets go to the people you want it to go to, or it goes to your, the government in taxes. And so, there is no way to avoid these transitions or the consequences of these transitions. So the more we can get in front of it with each of the clients and their families for whom this is going to be important, the more value we are going to provide, right? So these are the five elements. They can be kind of shifted and changed into any format depending on the family that you're dealing with. But these are really the things that are present in every family governance structure.

Chris Gies: And especially for the family who's really uncomfortable, or the parents who are really uncomfortable about having those conversations, encouraging those conversations to take place is of such huge value to that family, such huge value that the advisor can deliver five common elements for the family governance model. There are also five common types of family leadership. And, and on this next slide, I'm guessing you all have experienced them in your work with clients and their families. The Invincibles, The Controllers, The Blended Family, The Business Family, The Great Equalizers. Somewhat self-explanatory, and you'll remember a few slides ago, we talked about the role an advisor plays in these briefings. And while you're not a therapist, it does help to familiarize yourself with certain personality traits that family leaders can embody. Leslie, tell us a little bit more about this.


Leslie Geller: Yeah. And I think this idea of archetypes drives home the point that we're trying to make things as easy for advisors as possible, to engage in this type of multigenerational connection. So we created this idea of the family wealth briefing. So it's not a meeting. You're just ensuring everybody is on the same page, understands what's going to happen to the wealth. We created this very flexible model for a family governance structure: five common elements. And then finally, we have this archetype slide, which describes the different types of families, it's not all inclusive, that you might encounter in these conversations.

And on PracticeLab, that is where we have all of the details around the different archetypes, and the different types of things that advisors can do to support these families in their family wealth briefing, in their multigenerational transition of wealth. But just a couple of examples here. So, you know, I think the archetypes, this idea helps identify the actionable ideas that are going to be most relevant to the family in front of you. One of them was the Invincibles, right? I think that's self-explanatory: the family with the matriarch or patriarch who does not want to come to terms with the fact that they are going to die, they won't be here forever, and they have the lack of planning to prove it, right?

One of the main goals for the advisor with that type of family is to get the proper planning in place, right? To ensure that everybody has an estate plan, that the proper gifting, wealth transfer is done, income tax mitigation. But that basically the advisor's job there is to support getting that planning in place. And then the other one that I'll drop one more example, the Great Equalizers, this one is one of my favorites.

And this would be a family that wants to divide everything equally, right? And there's a big difference in equal versus fair. Fair is very subjective. It means a different thing for different people. Equal is equal. And for this type of family who is really set on dividing every asset equally among every child or grandchild, the advisor's job is to really suss out do they mean equal? Do they mean fair? And what does that look like? And then help the family accordingly. So different types of support in that family wealth briefing, depending on the archetype. But if you want more on that, there's more on the PracticeLab website in this specific article.


Chris Gies: Unfortunately, and we've spent some time on the family wealth briefing, there's just so much there that we couldn't go through everything on it. The good news is the “How to have a family wealth briefing” article from Leslie, it's on PracticeLab. You can get it in the resources section of your console. We're also going to send it to you, send a link to it in a follow-up email that we'll send to you. So, I want to make a turn because I want to turn to strategies that you all can use to work with clients and their heirs that build that intergenerational business relationship. I'd like to ask you to talk a little bit about why those strategies, why those techniques are so important.


Leslie Geller: Inter vivos gifting and lending, gradual transfer of control, and philanthropy are three big pillars, and we've kind of talked around these for most of the conversation today. It's not just the gift or the transfer of control itself, it's the communication around it, and you've heard that theme come out here. You're looking for ways to establish communication and build trust with that next generation.

Being supportive of family members' individuality in your engagement and selection of strategies is really important. Many times in higher net worth families, the individual creating the wealth will often have strong views and may even exert an outside influence on others in the family and how they should be doing things with their own assets. And that's going to be very challenging for an advisor to navigate at times, because going back to being Switzerland, you've got to be fair to that. But at the same time, you've also got to help push that individualization, because that's how you're going to make that connection to that next generation. Building and being that thoughtful advocate for allowing those individual preferences to be reflected is really key there. I think about the conversations with kids that I’ve seen and how they think about climate and ESG and things like that. That's at the very top of these kids’ mindset, these younger generations, as they think about the world and what they want it to look like.

And of course, philanthropy is always a great way, not always I should say, but many times a great way to encourage involvement, to get people comfortable with how do you manage great wealth? How do you become a great steward, a great human being? That's, you know, when you think about conversations with parents, that's really what they want. I want my kids to be great human beings. I want them to give back and help others from the success that we've had. Now, there are times when taking that track may not work, and I think it's important that we call that out as well.

Leslie Geller: I think philanthropy is one of those things that seems like it would be the perfect solution to get younger generations involved. It often is a fantastic way. But, for certain families, it just doesn't make sense. It can often be more divisive than unifying. And so, I think, you know, advisors’ mandate is to incorporate philanthropy where they know there is charitable intent, right? And where it is going to accomplish what they want it to. But you can't force people to be philanthropic or charitably inclined. There is lots of other ways in, right? Like we’ve talked about, from ensuring that everybody's ready for the wealth transitions, encouraging entrepreneurial spirit. There's other ways to do it. It's not just philanthropy.

Chris Gies: Yeah, yeah. And thank you. It makes a ton of sense. Lastly, there are ways to plant the seeds for the relationship-building, even at earlier stages. Maybe I could ask you to talk a little bit about why advisors should think about engagement at that level too?


Leslie Geller: Great question, Chris. Engaging early on, and on topics like budgeting and managing debt, savings, et cetera, is a great way to create that valuable knowledge transfer that will have long-term impact. You're going to establish knowledge transfer; you're going to establish a relationship. And for many parents, I said this before, helping their children develop good financial management habits is at the top of their list. Nobody wants to leave the earth with their families in disarray. They want to make sure that people are taken care of. They want to make sure that their kids are well informed and they are prepared for the future. That's what we commit to when we become parents. So over time, those conversations that you see on this slide here, those conversations can shift around based on the age group. As they move through into later times and ages, you're going to get into more sophisticated items. You'll talk about employee benefits, job transition, things like that that we've listed on the sheet here. You can evolve those. Don't bring those forward in the beginning. You're not going to be talking to a teenager about 401(k)s, unless they are a very enterprising young teenager that is actively involved and in a plan, which is unlikely. So, make sure that you're matching the market, so to speak, where that client is today with the things that you're bringing to them and their children.

Chris Gies: Sorry, but I get excited about this stuff. That makes so much sense, and may help to answer one of our viewers comments about having a tough time getting some parents to talk about this. That's a way to start easing them into the conversation and starting to see the value in bringing their kids into this overall conversation.

Leslie Geller: Remember how many times in your life your parents said something to you, and you doubted it and you questioned it, but then when the next-door neighbor or a friend or someone else said the same thing, all of a sudden it had the element of truth serum to it, right? And you responded to it. And it was new information to you. So that's really at the heart of this.

Chris Gies: Amazing how often that happens. There's been a lot out there about millennials and their unique attitudes and behaviors, which provides insight to things to consider and understand in order to be more relatable. Leslie, speaking from your current experience, please take us through some of the key areas to be aware of and to be well prepared for.


Leslie Geller: Yeah, so, I think a couple of things stand out for me, takeaways from what we've been talking about throughout the session, the individuality, right? In the engagement section. You want to make sure that your engagement is tailored to the individual and the family. As we talked about, this millennial generation spans 15 years, tremendous variability within that 15 years, both in life stage and in just individual personalities. And then, the people side of things, so succession planning, hiring and empowering next-gen talent. The one thing that I would caution over is that I see a lot of advisor groups with next-gen talent, but that next-gen talent is not fully integrated into the practice. And so everyone, all of the clients, are still wanting to only deal with the primary advisor, not the next-gen talent. So if there's one takeaway as far as succession plan and building out your business to support that next generation, it's really bringing that next-gen talent into the fold and into the client relationships early.

Leslie Geller: For the next generation, everything is kind of automatic and instantaneous. Like I said, they're very, very well informed consumers. You need to respect that and understand it. They're going to be really well read on things. So, helping them think through the issues that maybe they haven't looked at because they haven't had the experience to think multiple layers can be key, but kind of rejecting what they're thinking about out of hand is a perfect way to push them into the arms of another advisor. So, helping them think through the risk in managing that is key. And getting them, if they're going to do it, helping them do it but in a way that doesn't create financial risk, big financial risk, outside financial risk, is really important.

Chris Gies: Really important points, all four. OK. I'm clock watching. Let's pause for a minute though, and let me ask you, a lot of the advisors who are on the call with us today, they're working with hundreds of clients, if not more. How should they begin this engagement with the next generation?

Leslie Geller: I think the simple answer is start with your largest clients where the issue of the assets walking out the door would have a meaningful impact on your business. That's the kind of simple, straightforward stuff. And find a willing client that's on the pathway already to help you build that muscle memory to get it started. From there on, you can then work through the client segment, and you can create operational leverage by running small group sessions with the children of several clients at a time. Some advisors I've known have invited parents in a listen-only mode so that they have an understanding of what's being discussed. Because the last thing you want to have happen is have two different generations on the call and the older generation take ownership of the call and kind of manage it that way. So, it's really about that millennial or that next-gen and connecting with them. That gives you the operational leverage. So, think about your biggest clients and work your way down there and create leverage in the system through webinars and seminars and programs like that. That part is pretty straightforward.

Chris Gies: Awesome. Super helpful. If I were summing up today's event, we talked about the importance of engaging with the next generation of clients. We shared three strategies there: building bridges, creating business connections, and establishing trust. We also talked about three ideas: the family briefing, inter vivos and philanthropy responsibilities, and early financial guidance. As we near the end of today's event, I want to call your attention to a checklist that's available in the resources section and on our site. It's called the “Lifetime of value checklist.” And it kind of helps to lay out the different entry points through which you can start the conversation to build that relationship. If you could take a few seconds and tell us about how advisors could use that to help them with this sort of engagement.

Leslie Geller: This is a great slide because it aligns the kinds of conversation and actions you should be taking with where the client is in their life stage. And you can see how it progresses on the left-hand side in the early years from really basic topics, student loan review, budget analysis, et cetera, to way more complex strategies and topics as you move to the right. And it's just a great way for you to make sure you're checking those areas that should be important to that individual at that point in time. And even within each section, it can gear to earlier. Say, budget analysis on one end and equity compensation analysis for someone that's in their 30s and maybe is now in a role that's bringing them the equity and option participation. So, really does a great job of framing out the areas that you should be spending time. And it helps a newly independent millennial become financially independent. And again, like we've said throughout the call, it creates trust and it builds that connectivity.

Chris Gies: Really an easy guide to the conversation and one that makes it even more powerful. Let me end as I began. First, thank you, Leslie. Awesome, super helpful. Surfacing how big this opportunity is and starting to give us some ways to get after it. Let me also thank all of you for joining us. If you're like so many of the top advisors with whom we work, you're going to want even more detail on how to actually implement these ideas into your practice. If you do, let me give you a couple of places to go. First, our website for all things practice management, PracticeLab, as if it's all one word, lower case, dot com. Second, reach out to your Capital Group/American Funds wealth management consultant, retirement planning consultant, divisional wholesaler or internal wholesaler. They are your accountability partner for practice management. The why, the what, and importantly, the how. How to put it to work in your practice. Don't forget to take the CE credit quiz so you get maximum credit for being here. And finally, make it a great rest of the week and a profitable remainder of the year.



Do you have a multigenerational growth strategy?

As the largest generation of adults today, millennial investors are building meaningful wealth as they enter their peak earning years. And they are expected to inherit 40% of the more than $70 trillion in wealth transfer through 2045.* Advisors who are able to connect with younger clients and serve multigenerational households have gained a first-mover advantage in building relationships and assets with the next generation of clients.

In this event, Chris Gies, director of Advisor Practice Management and Leslie Geller, senior wealth strategist, will share top strategies for transitioning intra-family wealth within your practice and effectively engaging this next-generation clientele.

Register now for this CE credit event to get actionable strategies you can use to help grow your business today and also build a foundation for tomorrow. 

What you’ll get:

  • Top multigenerational growth strategies of successful practices
  • A differentiated blueprint for a successful family wealth briefing
  • A life-stage planning checklist aligned to key client milestones 

Who can benefit: U.S.-based financial professionals interested in evolving their practices for future generations of clients.

Leslie Geller is a senior wealth strategist at Capital Group. She has 15 years of industry experience and has been with Capital Group since 2019. Prior to joining Capital Group, Leslie was a partner at Elkins Kalt Weintraub Reuben Gartside LLP. She received an LLM in taxation from New York University School of Law, a juris doctor from Boston College Law School and a bachelor’s degree from Washington and Lee University. Leslie is based in Los Angeles. 

Chris Gies is director of advisor practice management for Capital Group. He has more than three decades of industry experience and specializes in training high-level advisors on various practice development topics.

*U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2021, Cerulli, Page 17 -18

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Featured Speakers
Leslie Geller
Senior Wealth Strategist
Chris Gies
Director of Advisor Practice Management
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