If you are a CPA or Financial Advisor and are looking for estate planning resources, this section is for you.  We believe that close collaboration between the estate planning lawyer, CPA and financial advisor leads to better service for the client and higher quality planning.  To that end, we would like to be a resource for you on estate planning issues.  We are a phone call away should you have estate planning questions or need assistance for any of your clients. 

Ways Myrna E. Arroyo, LLC Can Provide Value to Financial Advisors

A common perception among financial advisors appears to be that working "with" an estate planning attorney is a one-way street.  In other words, many financial advisors believe that they consistently refer clients to attorneys but see no new business in return.  This common perception is the result of at least two important factors.

First, this perception is often the result of a breakdown in communication.  The financial advisor incorrectly believes that the estate planning attorney can refer a steady stream of new clients.  To the contrary, many estate planning attorneys who work with financial advisors receive most - if not all - of their clients from financial advisor referrals.  Loyal to the particular advisor who referred the client, the attorney is unwilling to refer that client to a different advisor.  If the attorney did otherwise, the attorney would quickly alienate and lose all of his or her referral sources.

Nonetheless, the financial advisor expects client referrals, often because the attorney and financial advisor never discussed the issue or did so only briefly many months prior.  When the attorney never reciprocates with client referrals, the financial advisor sours on the relationship and moves on.

The blame here does not lie solely on financial advisors.  As the one who knows how they get their business, it is incumbent upon the attorney to explain to the financial advisor that he or she cannot refer new clients.  But that is not the end of the story.

The second factor concerns how attorneys view the attorney-financial advisor relationship.  Many attorneys believe that simply doing a good job for the referred clients provides enough value for the financial advisor.  Perhaps the attorney is also an expert in making that advisor look good in the eyes of the client.  While both add value to the financial advisor-client relationship, neither puts money in the financial advisors pocket directly.  Thus, these are the bare minimums of what the attorney should bring to the relationship.

For some advisors, these provide enough value for the advisor to continue referring clients.  This is particularly true where the advisor has figured out ways to parlay these into revenue.  But for many other advisors, that is not enough.  And it has nothing to do with the advisor "pushing product" or not looking out for the best interest of the client.  Attorneys earn revenue by doing the legal work as a result of the client referrals and, at the end of the day, financial advisors also need to earn revenue too.

(1) by helping the advisor to acquire and maintain assets under management, perhaps for generations; and

(2) by recommending or supporting the financial advisor's recommendations of financial products, where appropriate

For example, most studies indicate that the typical financial advisor manages approximately one-third of each client's investable assets.  Thus, if the referring advisor gets paid via assets under management, one simple way to provide value is to help that advisor acquire the client's other investable assets during the estate planning process.  In other words, the attorney can help the financial advisor triple his or her assets under management.

Another way attorneys can provide significant value is to recommend strategies that help the financial advisor maintain assets under management beyond the death of the client.  One of the biggest concerns of many financial advisors is losing assets under management upon the client's death, since their relationship is typically with the client and not with the children.

For example, recommending lifetime trusts is a simple way that attorneys can help clients meet their goals of providing creditor and divorce protection for their children or other beneficiaries, while at the same time helping financial advisor colleagues maintain assets under management, often for generations.

What if the advisor gets paid through product sales and not via assets under management?  In this case, it becomes incumbent upon the attorney to, at a minimum, support the advisor's recommendations.  Better yet, the attorney can provide significant value by learning the strategies that incorporate insurance, annuities, and long-term care insurance, and recommending these strategies when appropriate.

I hope this article has been helpful to you in shedding some light on how I can best work with you to create a mutual beneficial relationship between us.

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