Asset Retention: Advisors Should Start Courting their Client’s Kids

Multi-generational familyThe financial service industry is facing two major hurdles in the next decade.  The first is the wealth transfer of 30 trillion dollars from Boomers to the next-gen.  The second is a large group of financial advisors, plan to retire.  As these come together, financial advisors will need to manage both to maximize the sale of their practice.

The statistics are not positive.  Depending on what study you look at, the average retention of assets is less than 30 percent in the event of the death of a client. This includes just a transfer between spouses.  The average age of financial advisors is over 50, with nearly a third planning to retire in the next 10 years.

Avoiding the Asset Retention Problem

Fixing this future problem could be resolved with a simple strategic service addition.  This new service is a comprehensive college funding and student loan service.  It would allow the financial advisor to reach out to their current clients’ children with a meaningful service.  At the same time, establishing a relationship with them when that asset transfer occurs.  It will also strengthen the relationship with the spouse since it impacts their grandchildren in the future.

As an example, we are seeing clients who have paid for their child’s undergraduate education but now expect the child to pay for graduate school.  Grandparents are looking for the best ways to help with these increased expenses but are not too sure the best way to do it.

In addition to retention, it may be a great way to add new, younger clients.  The HENRYs (High Earners Not Rich Yet) are looking for student loan repayment and forgiveness advice.  Most of them acquired advanced degrees and have higher student loan balances

In these situations, they require the financial advisor to have a more in-depth skill set of educational funding and student loan repayment.  By adding this service, advisors will differentiate themselves from other advisors while establishing a family relationship rather than just a client relationship.

Opportunity Ahead – Income-Driven Repayment Trend

According to a 2018 Department of Education chart, approximately 54% of student dollars are now repaid using an Income-Driven Repayment (IDR) method.  This change offers a great opportunity for financial advisors and tax professionals since the new loan repayment strategies will require the advisor to manage a client’s Adjusted Gross Income.  The best ways to do that will be through retirement planning and other pre-tax strategies.

These same IDR methods are the only repayment methods that qualify for loan forgiveness.

Developing a Plan for Asset Retention

Educational funding and student loan repayment have grown more complex and expensive for families.  The advisor could get trained themself or bringing someone into the practice with this new and highly needed skill.  PayForED is the only training and software provider that puts both tools together in one place.  This simplifies the implementation and reduces costs by only needing one provider.

The trained advisor will need to have a basic knowledge of traditional financial planning.   A comprehensive training program will provide information on how the financial positioning works, advanced educational tax strategies, college saving plans, student loans, and various loan repayment strategies.   With this new expertise, the trained advisor will be able to reach out to the new client and begin to build a relationship with their client’s children.


With any business, the owner must always be on the cutting edge to maximize the opportunity and grow their business.  In addition to the knowledge, an advisor must be able to distribute this advice more efficiently.  This is another change that the advisor will be faced with during a next-gen relationship.  The PayForED software suite provides an interactive environment that helps both advisors and their clients navigate financial decisions from college saving to student loan repayment.

Educational funding is one of the few emotional financial decisions that cross over generations.  It is a life event and relationship builder that extends over multiple years.  Do you have the skillset or does someone in your office have the knowledge to grow and maintain your business value?

Here is another way to think of it.  Would you let your client make a $200,000 to $800,000 financial decision without your advice?


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