Clients who have a will in place are more likely to trust their fi­nan­cial ad­vi­sors, a sur­vey re­veals.

Clients who have a will re­port greater sat­is­fac­tion with their ad­vi­sors

Investment Executive - - FRONT PAGE - BY RUDY MEZZETTA

cana­di­ans who have aw­ill as part of their broader es­tate plan are much more likely to trust their fi­nan­cial ad­vi­sors and less likely to con­sider switch­ing ad­vi­sors, ac­cord­ing to re­cent re­search by Mis­sis­sauga, Ont.based Credo Con­sult­ing Inc.

Among the Cana­di­ans who were sur­veyed, those who have a will gave an av­er­age score of 7.94 out of 10 for the state­ment: “I trust my fi­nan­cial ad­vi­sor com­pletely.” In con­trast, Cana­di­ans without a will gave the same state­ment an av­er­age score of 7.34.

Sim­i­larly, the Cana­di­ans par­tic­i­pat­ing in the sur­vey who had a will gave an av­er­age score of 2.47 to the state­ment: “I’m con­sid­er­ing find­ing a new ad­vi­sor.” In con­trast, sur­vey par­tic­i­pants without a will gave the same state­ment a sig­nif­i­cantly higher av­er­age score of 3.97.

These find­ings were drawn from re­search con­ducted by Credo for the Fi­nan­cial Com­fort Zone Study, an on­go­ing na­tional con­sumer sur­vey, in part­ner­ship with Mon­treal-based TC Me­dia’s in­vest­ment group. (TC Me­dia pub­lishes In­vest­ment Ex­ec­u­tive.)

Your clients of­ten don’t con­sider the neg­a­tive con­se­quences that may arise from not hav­ing a valid and up­dated will in place, says Paul Fen­som, di­rec­tor of es­tate and trust ser­vices with Bank of Nova Sco­tia’s wealth­man­age­ment di­vi­sion in Toronto.

Dy­ing without a will may mean that as­sets aren’t di­vided in a way the de­ceased wished or that loved ones are left scram­bling to ad­min­is­ter the es­tate without any guid­ance or di­rec­tion. “[Hav­ing a will] helps you avoid un­in­tended con­se­quences,” Fen­som says.

Adds Amy Di­etz-Gra­ham, port­fo­lio man­ager and in­vest­ment ad­vi­sor with BMO Nes­bitt Burns Inc., in Toronto: “[A will] is your last word as to what you want to have done. And be­cause life gets com­pli­cated and things change, a will needs to be up­dated con­stantly.”

Ad­vi­sors are in the best po­si­tion to mo­ti­vate their clients to take ac­tion in pre­par­ing a will, says Chris­tine Van Cauwen­berghe, vice pres­i­dent, tax and es­tate plan­ning, with In­vestors Group Inc. in Win­nipeg: “Clients aren’t go­ing to go to the lawyer with- out some prod­ding on the part of their ad­vi­sor.”

You should be able to re­fer your clients to at least three lawyers who pre­pare wills, prefer­ably pro­fes­sion­als who have ac­cred­i­ta­tion in es­tate plan­ning, Van Cauwen­berghe sug­gests.

Clients of­ten are more re­cep­tive to the con­cept of get­ting a will done af­ter a ma­jor life event, such as a marriage, a di­vorce, a birth or a death. Age also is a key de­ter­min­ing fac­tor: only 11% of Cana­di­ans who par­tic­i­pated in the sur­vey and are be­tween the ages of 25 and 35 have a will, vs 86% of those 65 years of age and older.

“Of­ten, at re­tire­ment or when peo­ple are con­vert­ing an RRSP to a RRIF, they be­gin to turn their mind to how their re­tire­ment and wealth trans­fer plans are go­ing to be mapped out,” Fen­som says.

How­ever, psy­cho­log­i­cal bar­ri­ers some­times pre­vent younger peo­ple from hav­ing a will pre­pared, says Sara Gil­bert, founder of Mon­treal-based Strate­gist Busi­ness De­vel­op­ment: “They un­con­sciously think to them­selves, ‘If I get a will, that means I’m pre­par­ing to die’.”

The irony is that of­ten younger peo­ple are the ones who need to set up a proper will and es­tate plan the most, Van Cauwen­berghe says: “The most im­por­tant time to have a will is when you have young chil­dren, or if you have a de­pen­dent — some­one who’s count­ing on you and who would re­ally suf­fer if some­thing hap­pened to you.”

To con­vince your clients of the merits of hav­ing a will, you should help your clients “con­nect the dots” in terms of how not hav­ing a will would af­fect their fam­i­lies.

“When you look at a client’s life sce­nario, iden­ti­fy­ing a need usu­ally is pretty easy,” Van Cauwen­berghe says. “You don’t need to cover ev­ery item. Just iden­tify one soft spot that the client may be in­ter­ested in talk­ing about and open up the con­ver­sa­tion that way.”

Al­though you can’t draw up a will on a client’s be­half, you are well po­si­tioned to re­view it to flag po­ten­tial pit­falls, Van Cauwen­berghe says. For ex­am­ple, you can re­view des­ig­na­tions of ex­ecu­tors or guardians for their ap­pro­pri­ate­ness or see if gifts to chil­dren are set up prop­erly.

You also can stress the im­por­tance of com­mu­ni­cat­ing the key con­tents of a will to ex­ecu­tors and fam­ily mem­bers.

“You don’t want the first time [your fam­ily] reads the will to be af­ter you’re gone,” says Di­et­zGra­ham. “What if there are ques­tions or a mis­un­der­stand­ing of what you meant?”

Clients who go through the process of get­ting a will pre­pared as part of their larger es­tate plan are sat­is­fied about en­sur­ing their lega­cies are in or­der, Di­et­zGra­ham says: “They l eave our of­fices feel­ing that ‘I’ve cov­ered [the es­tate plan]. I have peace of mind. I don’t have that lingering feel­ing over my head of [not] get­ting my will done.”

The on­line Fi­nan­cial Com­fort Zone Study has polled 24,000 Cana­di­ans thus far. The sur­vey is meant to gain in­sight into the relationships among fi­nan­cial ad­vice, fi­nan­cial well-be­ing and over­all life sat­is­fac­tion in Cana­dian so­ci­ety. Cana­di­ans are polled monthly, and the num­ber of sur­vey par­tic­i­pants will in­crease each month.

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