New Research from Cerulli Associates and Everplans Explores Relationship between Advisors and Client Heirs; Concludes AUM at Risk

NEW YORK, Nov. 2, 2016 /PRNewswire/ -- While many advisor-client relationships weaken with each passing generation, overall, a majority of advisors believe they will continue to manage at least a part of their clients' assets for multiple generations, according to new research released today by Everplans, the online estate and legacy planning platform, and Cerulli Associates, a global research and consulting firm that specializes in worldwide asset management and distribution analytics. Of the more than 200 financial advisors surveyed, 90 percent believe they will continue to manage at least a portion or all of the assets once passed on to their clients' children, despite the fact that only seven percent of clients' children know the advisor.

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"In a relationship-focused business, advisors must make time for building better relationships – not just better businesses," said Everplans co-founder and co-CEO Abby Schneiderman. "Advisors inherently understand that they should be focusing on the next generation, but turning those good intentions into action is sometimes easier said than done. Everplans' holistic planning tool helps advisors have more meaningful conversations with clients and can be the perfect ice breaker in establishing good relationships with spouses as well as the next generation."

A vast majority of advisors (95 percent) has a relationship with their clients' spouses, but only two-thirds of their clients' spouses are clients of the advisor. Still, 75 percent of advisors surveyed remain confident that when their clients pass, spouses will keep assets with the advisor, even if they weren't the primary client. What if the money is passed to a grandchild? Half of all advisors believe the assets will stay right where they are even though 92 percent of advisors are unacquainted or only quasi-acquainted with their clients' grandchildren.

"What we have here is a case of wishful thinking," said Donnie Ethier, associate director, high-net-worth wealth management at Cerulli Associates. "Advisors today are under a tremendous amount of pressure – regulatory concerns, performance and returns, and just the general stress of running a business. These numbers should be a harsh reminder that while everyone is facing increased competition, it's important to maintain your relationships if you wish to continue to grow your AUM."

COMMUNICATION CRITICAL

While advisors indicated that they do not routinely collaborate with clients' other advisors on estate planning documents (e.g., attorney, CPA), upon the death of a client or their spouse, more than 20 percent of time is spent consulting/advising with other professionals. Similarly, 27.6 percent of their time is spent communicating with spouses and heirs to retain the inherited assets under advisement. After a death, it can be a time consuming task to coordinate and organize affairs. On average, advisors spend 16 hours compiling documents, consulting with other professionals, and distributing assets when a client passes away. For larger firms (with more than $500 million AUM), the time it takes to assemble key documents increases to an average of nearly 22 hours. The highest number of hours by a single advisory firm, as indicated in the survey responses, was 700 hours.

Bill Leeb, president of Financial Council, Inc. began offering Everplans to his clients in 2015. "For years, our firm had been seeking a method of strengthening the life and legacy planning branch of our service tree. Everplans has proven to be exactly what we were looking for, and so much more! Through our partnership with Everplans, we are able to dig even deeper in our efforts to build trust and take a 360 degree approach to our clients' financial lives," said Leeb. "With Everplans, our involvement as their financial advisor prompts deeper, forward-thinking conversations that become as natural, and as critical, as any of our financial discussions."

Advisors commonly document many aspects of their clients' financial lives, including held-away assets (89 percent), mortgages/loans (79 percent) and banking/credit card information (55 percent). However, there are some topics advisors don't routinely address as a part of their estate planning process but can be critical information for heirs, such as access to utility bills and digital accounts or details of funeral preferences.

BUILDING NEW RELATIONSHIPS

Some advisors, including many who use Everplans with their clients, have found the key to developing a business relationship with the next generation of clients is to simply ask. Nearly 70 percent of advisors ask their clients and spouses to get their children involved. Other top tactics advisors utilize to bridge the relationship gap include:

• Seek to involve future generations from the outset of the client relationship (42 percent)
• Host informational sessions with children of current and potential clients, focusing on understanding and managing wealth (38 percent)

Financial, estate and insurance professionals can request a demo of the Everplans Professional platform at www.everplans.com/professional.

ABOUT EVERPLANS

Everplans is the leading online planning and organization platform that helps people create, store, and securely share all of the important plans and information their family will need in the future. Through a combination of original content, a personalized guidance engine, an intuitively organized digital vault, and an enterprise platform for professionals, Everplans helps people create an estate plan that aggregates financial, health, personal, digital, and legacy information in one simple and accessible place. The company was founded by Adam Seifer and Abby Schneiderman, entrepreneurs with a passion for helping people and a proven track record of creating successful online communities. For more information, please visit www.everplans.com.

ABOUT CERULLI ASSOCIATES

Founded in 1992, Cerulli Associates is a Boston-, London-, and Singapore-based research and consulting firm specializing in asset management and distribution trends worldwide. Cerulli blends original research and data analysis to bring perspective to current market conditions and forecasts for future developments. Through our research publications, data platforms, custom research, and strategic consulting, we provide financial services firms with guidance in strategic positioning and new business development. Our repeatable, two-pronged proprietary research process (interviews and surveys) serves as the foundation of our published research and custom projects and provides clients with the necessary context, intelligence, and key implications to navigate today's and tomorrow's market environment. Cerulli's core product lines are complementary and are subscription-based. They include Cerulli Reports, The Cerulli Edge series, and Cerulli Lodestar.  For more information, please visit www.cerulli.com.

RESEARCH METHODOLOGY

The research was commissioned by Everplans, the online estate and legacy planning platform, in partnership with Cerulli Associates, a global research and consulting firm that specializes in worldwide asset management and distribution analytics. The study was conducted from August through September, 2016 as part of Cerulli's annual advisor survey. Asset information was self-reported by the respondents. Dedicated quantitative analysts reviewed all data for accuracy; survey analysts managed the distribution and data collection; and a survey review group ensured consistency and quality with all other Cerulli surveys. On average, advisors surveyed manage individual accounts of approximately $1.4 million with a minimum account size of $285,000, while the firms for which they work manage on average $1.1 billion in assets.

Jennifer Newman
Everplans 
917-587-9462
[email protected]

Jessica Taylor
Impact Communications
913-649-5009
[email protected]

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SOURCE Everplans