Australia’s rapidly ageing population means that financial advisers will increasingly need to deal with clients who die, and with support their grieving families.

Advisers who have experienced the death of a client will understand how stressful it is for those left behind to navigate their financial affairs.

Spouses, siblings and children are often looking for leadership, creating an opportunity for advisers to demonstrate the value and importance of a trusted advice relationship.

In times of economic crisis, such as a recession or market crash, financial advisers are an obvious first port of call. During times of personal crisis, they should also be the go-to person for clients and their families.

In the case of a client passing away, advisers should be able to quickly and confidently provide all necessary financial information and documentation to family members. Think HINs, SRNs, original wills, cost-base information for assets, insurance policies and beneficiary details.

The volume and quality of this information comes down to trust. It can take years for some people to fully trust their adviser. Many people don’t share everything up-front. However, as trust builds through time together and the consistent delivery of quality advice, more information is divulged.

Documentation becomes critical

Documenting client conversations and taking comprehensive notes has always been important but it becomes even more so as people age and their cognitive function gradually declines.

Older people may not perfectly recall the details of every client meeting but a trusted adviser who really understands their situation, preferences and goals, and has detailed notes, will have the information to fill in any gaps for them.

Traditionally, this information has been stored all over the place, making it difficult and time-consuming for advisers and their staff to locate and retrieve. Often valuable information is lost or discarded because the disparate data collected has traditionally had no logical home.

Not having a single source of truth can lead to frustration and inefficiency. But with digital advice tech solutions, advice businesses can create a repository of clients’ financial lives.

Information can be continuously collected, updated and stored in one secure, convenient place. The longer and richer the client relationship, the more information collected.

Currently, Australians inherit around $120 billion in assets every year. Over the next 25 years, that is forecast to rise to $500 billion per annum, according to the 2021 Productivity Commission report.

By 2050, around $3.5 trillion will have changed hands, as the Baby Boomers die and pass on their wealth to their children and grandchildren. This unprecedented intergenerational transfer will have significant economic and social impacts, yet studies show only a small percentage of children maintain a relationship with their parents’ advisers.

The main reason for this is that they have had no interaction with their parents’ advisers. Children often also presume they have different financial goals and attitudes about money to their parents, deeming their parents’ adviser incompatible.

Missing a timely opportunity

Advisers are missing a timely opportunity to establish a relationship with their clients’ children and heirs and, by doing so, to grow their business.

It’s important to understand that a relationship with a clients’ extended family – and even with their children – is not automatic and requires significant effort to develop. They need to form bonds with their clients’ children well before the wealth transfer occurs.

A good strategy for an older adviser with long-term older clients might be to introduce a younger associate to the mix when meeting with the children.

While it’s generally accepted that older people prefer to deal with people close to their own age, a good financial adviser is valuable at any age.

At its core, financial planning is about knowing clients well enough to make recommendations that meet their needs and objectives. Some of these needs and objectives are only apparent because the right questions were asked. Some of these questions were only truthfully answered because trust had been established.

Advice can only be as good as the information it is based on. Advisers can secure their position as trusted adviser for this generation and the next by taking steps to collect, update and store accurate, up-to-date client information.

Paul Moran is the Founder of iFactFind and principal of Moran Partners Financial Planning.

One comment on “Death and data open doors to a new generation of clients”
    Julie Matheson

    Great article Paul. Experiencing the death of a loved one is an emotional ride, not only working out their financial situation and legal capacity, but how best to process their cherished possessions, the things they have carried with them since being a child, their trophies, awards, and collectibles. Sharing this with a trusted financial planner always helps to cement the long-term benefits of the client/family relationship.

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