When wealth advisors devise strategies for their clients, children are often an afterthought. They’re mostly considered individuals who will acquire their parents’ wealth through a trust fund or inheritance. Sure, college funds and the occasional Roth 401k for the younger generation might get a little attention, but most efforts will likely focus on the parents.
The problem with such a myopic approach to wealth strategy is that advisors are far less likely to identify and act upon opportunities that can interconnect within multiple generations of family members. To create and execute the best short-term and long-term strategies for protecting wealth, advisors should service the entire family rather than just one or two individuals.
Glassman Wealth Services has elevated the concept of whole family management by prioritizing dedicated, personalized attention for each family member across generations. Glassman Wealth Services has purposely crafted a meager family-to-advisor ratio, ideally around 35 per advisor. This model allows advisors to take the necessary time to create personalized wealth plans that account for the preferences and traits of the entire family.
The willingness and time commitment to forming such strong relationships with clients has shown fantastic results, but it requires a very specific business perspective. Here are some cornerstones of Glassman Wealth’s philosophy on protecting generational wealth.
Availability is Key
Eric Dunner, Partner and Client Advisor with Glassman Wealth Services realize that most wealth advisors are stretched extremely thin. When clients are aware of this stereotype, they might be hesitant to contact their advisor for matters that do not seem very important.
“A lot of time, clients will say, ‘I’m so sorry to bother you.’ There’s just this notion out there that financial advisors are too busy; they don’t have time for you,” Dunner explains. “And I want people to know that emotionally, that’s not how they have to feel. They don’t have to feel the way about an advisory relationship they’ve been conditioned to.”
Glassman Wealth encourages clients to contact them with questions and life updates. This gives advisors more information for crafting strategies tailored to their clients.
And availability isn’t limited to account holders. Glassman Wealth considers clients’ parents and children to be full clients in their own right. That effectively gives Glassman Wealth three generations of individuals to strategize with and devise mutually beneficial solutions.
According to Barry Glassman, founder of Glassman Wealth Services, this is not standard for the industry.
“Some brokerage firms think, ‘If the adult son or daughter doesn’t have assets, why would we answer their questions about their mortgage or a home purchase?’”
However, welcoming that information and answering those questions goes a long way toward better understanding the family’s financial needs.
For example, a family unit might have grandparents who want to put money aside for their grandchildren’s college education. Suppose an advisor is available to all three generations. In that case, they will likely have information on what savings device would be most beneficial to the grandparents, how much the parents will contribute toward college expenses and the estimated educational trajectory of each grandchild.
Suppose one grandchild intends to join the military, one plans to apply to dental school, and one plans to attend trade school. In that case, the amounts needed to fund their education will differ. A wealth advisor who takes the time to build strong relationships with all three generations will be able to decrease the likelihood of grandparents over-contributing to college funds when those funds could be better utilized elsewhere.
Educate the Younger Generations, Especially Through Mistakes
Protecting generational wealth isn’t just ensuring parents can pass down X dollars to their children. All that effort and planning can be wasted if the recipient doesn’t receive guidance on how to manage those funds properly.
Wealth advisors can be integral to educating the younger generation and giving them the best chance of success if and when they receive family money. Investing intensive time into the next generation involves looking at a family’s balance sheet differently. Once Glassman started considering how a person’s knowledge and actions can benefit or harm a family’s financial future, it changed how the firm approached education.
“When you think about a family’s balance sheet, you have assets and liabilities,” he said. “An asset could be an independent child who is providing for their own family and for society. A liability could be someone who mismanages all their money and requires a lot of resources to keep them going. So what if, starting at an earlier age, we’re able to help them develop better assets?”
Glassman Wealth works with its clients to devise educational opportunities that actually allow the younger generation to succeed or fail with real money and learn from their mistakes. The trick is to do so in a way that allows failure on a manageable scale rather than a catastrophic one.
“With really well-to-do families, they might have trust provisions that give children access to funds at ages 30 or 40. We might propose that a smaller amount be released to children in their 20s or teens to see how they manage money when it’s not tens of millions of dollars. We can then let them learn from their mistakes and learn from their parents and Glassman Wealth.”
It’s an innovative approach that only works if the advisor is established with an entire family unit and knows the various personalities and financial components unique to each group. This comprehensive, multi-generational approach is a powerful example for those who want to build and protect lasting wealth. True generational wealth is not just about accumulating assets; it’s about creating a legacy guided by shared values, financial literacy, and mutual support across generations.
