- Estate planning can lead to other actionable opportunities.
- Starting dialogue with beneficiaries could build longevity for your business.
- Focusing on the small things in estate planning could lead to big returns.
In many ways, financial professionals are like coaches for their clients. By providing guidance and support, you can help them pursue their goals. Similar to the relationship athletic coaches have with their players, your success is entirely dependent on your clients’ success. Therefore, the most successful financial professionals, and coaches for that matter, put their clients’ needs ahead of their own. They are also willing to do all of the seemingly little things that add up to achieving their stated objectives. It’s natural, then, for financial professionals to look to some of the great coaches for inspiration.
One of the all-time greats was the late head coach for the UCLA men’s basketball team from 1948-1975, John Wooden. He holds a number of mind boggling NCAA coaching records, such as seven consecutive national titles, an unprecedented 10 total titles, and an 88-game win streak. If you ever find yourself in need of some creative insight into success and achieving goals from the mindset of a coach, I would highly recommend reading some of his work or going online and watching videos of him speak.
Upon closer examination of Coach Wooden’s legacy, it’s remarkable that he was willing to take on tasks many others simply overlooked. For example, as legend has it, before the start of every season he would take time to teach every one of his student athletes the proper way to put on their socks — even the upper classmen. This meant that all-time great basketball players like Bill Walton and Lew Alcindor (Kareem Abdul-Jabbar) spent time at the beginning of each season going through this lesson. Coach Wooden was also known to be found sweeping the floor of the gymnasium and picking up trash in the locker room during any given week. With leadership and coaching like this, it’s no wonder his players revered him so much and achieved so many of their individual and team goals.
What does all this have to do with estate planning?
With the recent changes in the tax code, some prominent voices in financial services have expressed the belief that estate planning is less relevant than it once was. Many have gone so far as to declare estate planning dead. While there have certainly been changes in the tax and regulatory environment, financial professionals may want to consider an alternative point of view.
There is no question that the increase in the federal estate tax exemption to nearly $11.2 million ($22.4 million for married couples) has changed the strategic initiatives for many financial professionals and their clients. However, it doesn’t mean estate planning is now irrelevant. In fact, the argument could be made that it’s the perfect time to talk to your clients about fundamental estate planning topics. It may not be the most glamorous part of our jobs, but clients need help with things like routine beneficiary reviews, asset titling analysis, and other tax considerations that extend beyond the federal estate tax (for example state estate taxes and income in respect of a decedent vs. step up in basis assets).
On top of all that, clients’ lives are constantly evolving and they need ongoing help in this area to make sure their existing plans align with their current needs and objectives. It can be beneficial from a business-building perspective as well because many of the key questions that should be addressed during an estate plan assessment often lead to uncovering new actionable opportunities for the financial professional.
The most current research tells us that roughly two-thirds of all individuals who inherit wealth fire their benefactors’ financial professional.1 By placing a few timely phone calls to beneficiaries and starting a dialogue with both parties, financial professionals can drastically decrease this risk and bridge the gap to the next generation within a family.
It’s easy for financial professionals to sometimes overlook the importance of this topic. Let’s face it, things like market volatility and tax management not only come at us faster, but they also address the more immediate client pain points. Estate planning, on the other hand, is one of those areas of our business that seems totally unimportant right up until the point it very quickly becomes the most important topic for our clients and their families.
The little things that make a big difference.
In many ways, routinely having the estate planning conversation with your clients and their future heirs may seem trivial. But much the same way Coach Wooden and his players focused on the little things like sweeping the floors and putting on their socks, engaging in an estate planning conversation can make a huge impact over the long run.
Transamerica is here to help. The Advanced Markets Group has created several resources such as a Guide to Estate Planning and a Beneficiary Review Checklist to help you help your clients in this important area of our business. For more information, please contact your Transamerica sales associate.
Things to Consider:
- Have regular conversations with benefactors and beneficiaries.
- Show how even the smallest details could provide a better financial future for your clients.
- Estate planning isn’t dead – the goals have just changed.
1The Great Wealth Transfer is Coming; Putting Advisers at Risk, Investment News, July 2015.
Neither Transamerica nor its agents or representatives may provide tax, investment or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein. Securities are offered through Transamerica Capital, Inc.
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as, medical, insurance, securities, tax, legal or financial advice or guidance. Please consult your personal independent advisors for answers to your specific questions.