intergenerational wealth planning

We’re in the midst of the largest wealth transfer in history. Over the next 10 years, it’s estimated that $1,050 trillion1 is set to exchange hands across generations. Are advisors and inheritors prepared? Research suggests maybe not.

  • 51% of Canadians expect to transfer wealth, but 47% haven’t discussed the inheritance with the recipients.2
  • 70% of legacy transfers fail,3 meaning a client’s vision is never realized—usually because of a breakdown in trust and communication among family members.
  • 49% of children leave their parents’ advisor once assets are inherited.4

Are these stats concerning? Absolutely. In fact, 72% of advisors are very concerned about retaining assets of clients who’ve passed away.5 The good news is, many of these wealth transfer pitfalls (as they relate to both you and your client) can be avoided.

Further, you’re in a position to have the biggest influence over positive outcomes. One of the best ways to initiate conversations with clients is to ask, “You’ve prepared the money for your family, but have you prepared your family for the money?” More often than not, the answer is no and, if that’s the case, the solution is simple: get your clients talking about their legacies with their children.

Opportunity: Wealthy Canadians worry about legacy plans the most6

  • 32% of affluent Canadians say they’re worried about how their heirs will handle their inheritance
  • 36% say their children don’t have the financial literacy to manage a potential windfall
  • 28% don’t trust their children’s spouses to manage their heirs’ inheritance money

“We know that money conversations can be sensitive, but someone needs to take the lead to ensure the family is prepared for the inheritance they’ll receive—and it might as well be you,” says Jillian Farrow, Director, Strategic Business Development at Sun Life Financial. “This also puts you in a great position to begin developing relationships with your clients’ family members, which will ultimately help you retain the assets of the family when the client passes away.”
But how can you do this? Let’s discuss.

4 steps to family wealth conversations

You see the need, but now you need to start the conversation and put a plan into action. Consider the following 4 steps to build trust and relationships with family members, and positively affect legacy success rates for clients.

  1. Understand family dynamics – Gain a strong understanding of the key people in your clients’ lives, including their family dynamics, goals and values in order to discover what they want to achieve and why. “This step is critical to identifying gaps in a client’s situation as it relates to their legacy wishes and plans,” says Farrow.
  2. Engage the spouse and meet the family – Reflect on your relationship with your client’s spouse. Are they engaged in the meeting? Do you have a relationship with both partners? If not, look for ways to develop deeper relationships with both. Proactively make a plan to ask for introductions to the client’s family members and seek opportunities to build rapport and trust with them. “The holidays may be a great time to meet your top clients’ families. Stopping by over the Thanksgiving weekend with dessert to share could be a great opportunity to get to know the family and start conversations, in a place where everyone is comfortable and relaxed,” suggests Farrow. Did you know? 65% of advisors have never met their client’s children, but more than half of clients surveyed say they’d be willing to make that introduction.7 [tweet this]
  3. Transform heirs into clients – Put yourself in a position where you can convert adult children and heirs into clients by focusing on their unique needs. Seek opportunities to establish a rapport with them, build trust and prove your value on an ongoing basis.
  4. Set the legacy plan in motion – Work to address any gaps identified in the discovery phase, and recommend the appropriate solutions to create a comprehensive legacy plan. Offer to help clients communicate the plan to their family members, and address any questions or concerns that may arise.

READ MORE: Why it’s important to connect with female clients

What’s in it for you?

We know that having a legacy plan and communicating this plan and wishes to the family members can help a family remain whole and harmonious. We also know that there are business benefits for those advisors who adopt this process, such as:

  • retaining assets when a client dies;
  • gaining new clients and capturing next generation assets;
  • creating engaged clients through strengthened and trusted relationships;
  • strengthening your value proposition by offering a differentiating service;
  • developing your centres of influence and referral network through strategic partnerships; and
  • building longevity into your business.

“Simply put, family wealth planning conversations are worth having  for both your clients and your business,” says Farrow.

Build a strong legacy with insurance products

Before engaging family members, it’s good practice to help your clients establish a clearly defined, achievable legacy plan. Not only is it the right thing to do, it helps ease the minds of your clients, who worry about financially burdening their family when they die.8 Life insurance can reduce the financial burden through guaranteed death benefits, and enhance tax efficiency by bypassing probate and other estate costs, leaving heirs with more money.

You can also integrate guaranteed wealth products into a legacy plan to complement life insurance. [tweet this] For example, while the estate of the owner will incur a taxation disposition for guaranteed investment funds (GIFs), they generally provide a tax-free death benefit to the beneficiary. They also provide insurance benefits like potential creditor protection, as well as the ability to name a beneficiary and avoid probate. There is also the legacy settlement option, which further supports the efficient transfer of wealth to beneficiaries.

Start legacy conversations now

Be proactive in initiating legacy-planning conversations. “There’s no bad time for a client to outline and communicate their legacy wishes, but there comes a time when it can be too late,” says Farrow.

Look for these life-event opportunities to be proactive and bring the topic up to your clients.

  • When everyone is healthy—why not start today?
  • When a health event occurs
  • Upon the death of a parent or spouse
  • When there is a major life event in the client’s adult children’s lives (marriage, children, etc.)

“By supporting the heirs during the difficult experience of a death in the family and making the process less stressful, advisors can solidify existing relationships, or establish new ones with the heirs,” adds Farrow.

Intergenerational wealth planning is critical to your clients’ success and yours

Proper legacy planning and intergenerational wealth transfer are crucial for clients and their families. By establishing relationships with family members and working with them to plan and administer the transfer of wealth, you play a key role in keeping families harmonious and financially secure, while also helping you continue to build a successful practice. Make time; it’s a conversation worth having.

Contact your Sun Life relationship manager to get started on Sun Life Financial’s exclusive intergenerational wealth planning program.

This article is based on a presentation by Jillian Farrow, Director, Strategic Business Development, Sun Life Financial.


1 2017 Household Balance Sheet Report, Strategic Insight

2 Canadian Imperial Bank of Commerce (CIBC), 2015.

3 Preisser, Vic and Roy Williams. “The Future of Estate Planning.” Trusts and Estates, June 2010

4 PwC Global Wealth and Private Banking Survey, June 2013

5 MFS Investing Sentiment Survey, (US) April 2013

6 Affluent Canadians are worried about wealth transfer, IPC/Environics, January 2018

7 MFS investing Sentiment Survey, April 2013

8 Sun Life Retirement Now Report, 2016