TaxSep 28 2020

How to get clients to refer you to their parents

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How to get clients to refer you to their parents
Photo: Andrea Picaquaido via Pexels

“It’s not about the brochures in your hand - it’s about the pictures on their wall."

These were the words of Nick Bird, executive business development manager for Octopus, at the Chartered Institute for Securities and Investments' Paraplanner Conference 2020.

During a breakout session he spoke of the need for intergenerational planning, calling it “perhaps the most bespoke piece of financial planning you will do”, and underlined the importance of the advice process which, he said, was even more important than the investment portfolio.

But when it comes to intergenerational planning, he said, it often depends on the client bank. Some firms, for example, may have more Generation X clients rather than people in their 70s who want to discuss estate planning. 

“There is a big opportunity here”, he said. “Is there a lack of family referrals? If you have a client in their mid 40s or 50s, who you have are beneficiaries - those who will be affected by IHT. The parents aren’t worried about the tax - it won’t affect them. But it might affect your clients, so think about upward referrals to their parents.”

He advised delegates to “always” ask if the client can make an upward referral to parents. Indeed, he said as part of the fact-find, why not ask the client to draw their family tree? This could open up intergenerational referrals and help clients to understand how their financial plans can help the whole family, he suggested.

This was because of the wider work around tax planning and helping the client make the most of their hard-earned money so they could give it to the “people they love”.

He said: “People don’t buy numbers; they buy emotions. So this money is about helping them to provide security for their family members, or giving grandchildren the gift of fun or education.

“An inheritance that might come to them will give the inheritor the opportunity to be secure or to have fun. Take the conversation away from money and turn it into emotion: clients should feel happy they are doing this planning and making these decisions.”

Don’t forget - you are allowed to pay the tax bill. -- Nick Bird

The first consideration, however, is to ask the clients how they want to “spend it”. It’s their money - are they going to use it to enjoy their own lives? However, if they are not going to spend it on themselves, consider how they might give it away, whether to charity or to someone dear to them, he told delegates.