How advisors are connecting with clients’ kids

Advisors who want clients’ kids to join their book are engaging with them as early as possible.

Rather than waiting until kids turn 18, you can consider consulting with their parents about setting up an educational phone or video call, said Ty Cooke, director of wealth management and investment advisor with Orlic Harding Cooke Wealth Management Group at Richardson Wealth in Burlington, Ont.

Cooke and his team serve approximately 200 households and typically take on clients with a minimum of $500,000 in assets, but they encourage clients’ kids to join the family account and think about their futures.

“As part of our [discovery] process, we do actually spend just as much time learning about our clients’ children and grandchildren — and even pets,” he said. “It’s silly, but it does work.”

Specifically between March and May, Cooke puts extra effort into connecting with clients and their kids, to ensure their financial plans are thorough and updated.

“The combination of [April] being Financial Literacy Month and tax month brings it even more to the forefront,” he said, adding that tax and holistic planning conversations often lead to chats “about the second generation and even third generation.”

Alongside phoning and emailing, Cooke can text clients and leverage in-house monthly webinars on relevant topics, with the webinars often being passed to clients’ kids.

From there, helping young investors often begins with talking about their RESPs, he said, which their parents set up but which kids want to learn about. Other avenues include talking about TFSAs for when kids turn 18, as well as informal trusts that can be set up in a child’s name for when they turn 18.

Sajjad Hussain, partner and investment advisor with Allen Private Wealth Group at iA Private Wealth in Toronto, finds that “most of the work happens” when children turn 18. Still, his team aims to engage with kids as early as parents are comfortable.

He and his team work with 500 households and four generations of families, and intergenerational wealth management has been a team focus for decades — long before he joined in 2015. While they typically work with accounts worth $2 million or more, that’s not a rigid rule and clients’ adult kids are welcome.

They can combine their assets with their parents if that’s efficient when it comes to fees, but decisions are largely made based on kids’ goals; these are often shorter-term to start, with funds needing to be liquid within two to five years.

For younger kids, they often discuss and set up savings accounts, to safely show how assets can grow, Hussain said.

Offering early guidance on how to properly research and assess stocks can also be particularly helpful, Cooke said, given the activity around names like GameStop. One client’s 15-year-old son “was taking a financial course and had done a ton of research online using reputable websites, and asked his dad if he could try out some of the stocks.”

With Cooke’s help, “the client decided to do an explore piece in his personal account to show [the son] what would happen — and a couple worked out really well while a couple blew up,” he said.

These types of interactions lead to early and positive connections with clients’ kids, Cooke said, and that can also make it easier to handle requests from parents about tax-efficient gifting later on.

“We’ve seen a lot more of that; it’s becoming big,” Cooke said, especially in an environment where it’s “virtually impossible” for people in their 20s to get into the housing market and build savings.

Overall, “When you’re helping any family member achieve success, one of the most important things for most people is their children,” Hussain said. “You can’t call yourself a holistic wealth manager without understanding the whole family’s dynamic.”