Building Your Estate Planning Practice: Essential Steps for Financial Advisors
Estate planning is a critical component of comprehensive financial planning. It empowers individuals to define their legacy and ensure their assets are distributed according to their wishes after they pass away. Financial advisors play a key role in guiding clients through this process, helping them navigate complex decisions and ensure their financial goals are aligned with their values.
Since most financial advisors aren’t legal professionals, they collaborate with lawyers to provide estate planning guidance to clients. But how do you establish a successful estate planning practice as a financial advisor?
This guide outlines the steps to starting an estate planning practice as a financial advisor. It also explains financial advisors' role in estate planning, building a client base for your own estate planning practice, using Asset-Map for client conversations, and more.
Estate Planning: What Financial Advisors Need to Know
Estate planning entails making a plan for distributing everything a person owns, including property, cars, investments, bank accounts, life insurance, etc., after death. One thing is certain: people cannot take their estate with them when they die, and that’s where estate planning comes in.
Key components of estate planning include:
Wills. A last will and testament is a legal document that lays out how a person wants their property and assets to be distributed post-mortem. A will names beneficiaries to receive assets and an executor to manage the estate and fulfill the person’s dying wishes.
Trusts. A trust is a legal relationship where a grantor gives a trustee the right to hold assets or property for the benefit of a beneficiary. The grantor gives specific instructions to the trustee on how to manage and distribute assets to the named beneficiary.
Power of attorney. This legal document gives someone a person chooses (agent) the permission to act on their behalf under certain circumstances. If the person becomes incapacitated, the agent can make healthcare decisions, manage finances, handle legal matters, etc.
Healthcare directives. A person can specify their medical care wishes in this legal document. Healthcare directives can include do-not-resuscitate orders, living wills, or powers of attorney.
The Role of Financial Advisors in Estate Planning
While financial advisors are often not trained legal professionals, they play an important role in estate planning. Financial planners provide financial advice to complement the legal strategies taken by an estate planning attorney.
For instance, a financial advisor can help clients identify estate planning gaps in their comprehensive financial plans. Financial advisors often work with their clients for many years and, over time, get to know them closely. They likely understand their family dynamics, level of financial literacy, and other nuances from their long-term relationship. Advisors can also ensure that their clients fully understand the administrative requirements of an estate planning strategy set by estate planning attorneys.
Benefits of Estate Planning for Clients
Many people don’t understand the benefits of estate planning. Only 24% of Americans have a will, down from 33% in 2022. The primary benefits of estate planning include:
Asset protection
Tax benefits
Wishes are honored
Avoid probate
Minimize taxes
Steps to Establish an Estate Planning Practice
Financial advisors looking to establish estate planning services as part of their practice should follow these steps.
1. Meet the Educational Requirements
Professionals offering estate planning services normally have a finance, law, or accounting degree. Financial advisors may consider getting certifications, such as Certified Estate Planner (CEP), Accredited Estate Planner Designation, or Certified Trust and Fiduciary Advisor (CTFA). While not required by law, these professional certifications help financial advisors set themselves apart from competitors.
2. Build a Network of Lawyers
Even if you have a background in law, it’s best to build relationships with estate lawyers as a financial advisor. Partnerships with trusted lawyers give your clients a team to help them with estate planning. You can refer clients to your professional network of estate lawyers to collaborate on their estate planning needs. Building relationships with law firms sets you up for referrals to your own practice as well.
3. Integrate Technology
Technology is key to providing seamless estate planning services. Financial planners can utilize platforms like Asset-Map to facilitate the visualization of estate plans. Asset-Map and other tools help improve client understanding, guide conversations, and boost engagement.
4. Market Your Estate Planning Services
To market your additional service, bring the news to your existing clients first. Since you have already established rapport, you can easily integrate estate planning into their financial plan. After offering your additional services to current clients, use traditional and digital marketing strategies to attract new clients.
Consider running paid advertisements on Google or Meta, implementing search engine optimization (SEO) for estate planning, or sending email newsletters with more details. Estate planning services are relevant to all demographics, but you may consider marketing specifically to people nearing retirement age and looking for a trusted advisor.
5. Focus on Client Engagement
Once you’ve established your estate planning practice, work to make estate planning more accessible. Asset-Map’s clear visuals and detailed reports enhance client engagement and satisfaction. Visualizations create something tangible that clients can understand.
Collaborating with Lawyers
Financial advisors should collaborate closely with estate planning lawyers to provide the most valuable services. This collaboration allows financial advisors to help clients implement their plans.
Financial planners should keep open lines of communication with their legal partners to ensure accuracy and cohesiveness. Hosting joint strategy sessions between advisors and lawyers is also extremely beneficial. These sessions enable professionals to share ideas and create the best estate plans for their clients.
Asset-Map helps facilitate collaboration between advisors and lawyers through the Legal Instruments feature. With Legal Instruments, you can document and track a client’s legal arrangements within the Asset-Map platform.
Building a Client Base for Your Estate Planning Practice
Establishing your estate planning practice is one thing, but how do you find clients? These tips will help you build a loyal client base for your financial advisory practice.
1. Identify Your Target Audience
Create an ideal client profile for your estate planning services. Depending on your expertise and specialty, this ideal client may be looking to:
Protect their family members' financial futures
Pass on assets in the most tax-efficient way
Manage their high net worth
Pass on a business(es) to children
Plan for a genetic disorder
Additionally, your current clients may be interested in your expanded services. After understanding your target audience, develop a marketing strategy to reach it.
2. Use Engagement Strategies
Engage prospective clients through attending seminars, hosting webinars, and publishing educational content. It’s important to attract your ideal clients by sharing relevant information that builds your credibility.
Present at seminars to connect with other professionals and potential clients interested in learning about estate planning services.
Webinars are a fantastic means of building trust and credibility among potential clients. You can share your knowledge with your target audience and introduce your planning methods.
Offer valuable long-form content focused on the importance and benefits of an estate plan. You can attract new clients to your practice by publishing SEO-optimized blog posts or sharing LinkedIn content.
3. Utilize Social Proof
Prominently display testimonials and case studies on your website to share social proof. These small snippets can significantly impact the perception of your practice. Ask current or former clients to share their positive experiences working with you. Visitors to your website will instantly have built trust in your expertise.
Enhance Your Estate Planning Practice with Asset-Map
Estate planning is a great service for financial planners to offer. Financial advisors can help clients effectively pass on their assets as they desire. To start an estate planning practice, it is critical to network with lawyers, market your services, and use technology.
Asset-Map is a platform designed to empower financial planners to have better client conversations. Consider using Asset-Map’s comprehensive visualization capabilities to enhance your estate planning services.
Schedule a demo to experience Asset-Map today. For more information on estate planning and other financial strategies, visit our blog!