Say Hello to In-Depth Estate Planning

Susan O’Brien

Senior Vice President and Senior Wealth Advisor, BMO Nesbitt Burns


As a follow-up to her article, “Say Goodbye to “Financial Planning Lite,” multiple Wealth Professional honouree Susan O’Brien discusses growing your practice through estate planning techniques that create wins on all sides – and help build your relationship with the next generation.

Successful Planning is a Process

Roughly 12 years ago, I realized growing my business would require a BIG shift in attention. Despite what I had been trained to do as a young Advisor, I needed to spend fewer hours researching stocks and bonds, and more time discovering critical factors for an integrated financial plan.

Since then, my team and I have been busy scaling up the estate planning side of the business. We strive for in-depth conversations with multiple generations, because if we’re only getting face-to-face time with one member, typically the patriarch, then we’re likely going to lose the whole family relationship.

Retaining inherited assets has been one of the biggest challenges in our industry. Firms typically lose 70%-80% of money that’s transferred from one generation to the next.1 However, based on our observations, keeping the entire group engaged through regular discussions can build valuable relationships that insulate a practice from AUM erosion.

How We Navigate Complex Conversations

Prior to meeting the entire family, we sit down with the matriarch and patriarch to outline an agenda, focussing on the issues at stake. We create a warm, trusting environment that enables them to share their most intimate concerns, such as, “we love our children, but supporting them is costing too much,” or, “we want to protect against marital claims, but don’t know how to raise the topic of a pre-nup.”

Next we include the adult children, spouses, and sometimes even grandchildren depending on the topics being raised. Our goal is to bring the family together. Though we see varying levels of engagement from the younger generation – some are very involved, others may even be resentful at first – we strive to take the emotion out of the room. We explain that their parents have put in hours and hours trying to perceive what issues could arise in the future, and we’re here to eliminate those concerns and make sure everyone has a common understanding.

Adult children may have misperceptions about the size of the family fortune, so it’s important to demonstrate that, by gifting excessively, their parents may end up running out of money or negatively impacting their lifestyle.

In our experience, forging relationships with younger generation before university, preferably between 16 and 18 years old, helps engender trust which could be reciprocated once they inherit. That way we’re around for their first job, helping them choose benefits and sort through savings options under their defined contribution or group RSP plans. We’re there when they get married, when they have their first child, and when they start saving for the kids’ tuition. We are in their lives throughout.

Optimize Net Worth for the Entire Family

Some parents worry their children will not have the same lifestyle they have enjoyed. Whether that’s because of home prices in Toronto and Vancouver, or opportunities in the job market, the fact is they generally want to help their children. And their assistance can take many forms, from helping pay for a wedding to lending startup funds for a new business.

Once we know how much our clients are comfortable giving in those areas, we crunch the numbers to see what’s possible. Adult children may have misperceptions about the size of the family fortune, so it’s important to demonstrate that, by gifting excessively, their parents may end up running out of money or negatively impacting their lifestyle.

Then we need to consider structure: Is it a gift with no strings attached? Or is it a loan which can be re-called in the event of divorce? Even for seemingly routine expenses, such as the grandchildren’s education, we need to decide if it will take the form of a Registered Education Savings Plan or a trust.  

Charitable giving is a core part of my life – and my business. It’s something I do on a personal level, because I’ve been lucky to have loving parents and a good education, and others have been less fortunate.

Those coming to us in their 40s, 50s and 60s also, typically, have parents still alive and involved in philanthropy. We ideally want to also bring this older generation into the fold, not only to better understand a new clients’ situation but also to ensure the assets are organized efficiently from a tax perspective. At the same time, we want to meet with siblings, who often play the role of guardians and executors. By mapping out the entire family tree, and knowing the concerns of each branch, we can really look at maximizing the net worth of the entire structure – both during their lifetime and afterwards.

Strategic Philanthropy as a Key Consideration

Charitable giving is a core part of my life – and my business. It’s something I do on a personal level, because I’ve been lucky to have loving parents and a good education, and others have been less fortunate.

In my experience a lot of wealthy Canadians are similarly inclined, especially given the fear that leaving too much money to their children will act as de-motivator in the long run. Many are genuinely concerned that leaving a large inheritance will prevent their children from developing independent careers, confidence and self-worth. So, we ask: If not your children, then who are you giving it to?

This kickstarts a more nuanced conversation on philanthropy. Do you want to benefit an organization that’s important to you? Would you consider donating to your alma mater? Regardless of the specific foundation or cause, we find there’s usually an organization which relates in some direct way to the client’s personal experience. Where we can add more tangible value is through identifying and leveraging tax credits that make it efficient to give back.

There are wins on all sides: charities benefit tremendously, clients get a chance to build their legacy and generate tax savings, and the children are included in dispensing the money through the use of donor-advised funds and other structures.

Tips for Working with Millennials

As a whole, our industry could do more in terms of speaking to high-net-worth millennials. Research shows 90% of this demographic are eager to access responsible investments in the next five years, because they care deeply about having a positive social impact.2 They want to earn a return, but they also want to reflect their personal values. Wealth managers who speak to these needs, and supply clients with quality ESG investing solutions, will be strongly positioned to retain assets as Canadians pass on an estimated $1 trillion to individuals between 25 and 40 years old.3   

I think of my own children, who are in that age group, and what they look for in ALL relationships – personal or professional – can be summed up in one word: authenticity. Millennials place a high value on openness and transparency. So we put our cards on the table. Every topic is up for discussion, from fees to mental health issues. We try to create a warm, welcoming environment where they can express their deepest desires – and then we look to execute.

I always think of Henry Ford for inspiration; when people wanted faster horses, he gave them cars. Similarly, we must stay one step ahead of clients’ expectations to demonstrate our comprehension – and value add.

We also make a point of only accepting clients where it’s possible to meet both spouses, because it’s their life together that’s significant. What are their total expenses? Have they saved enough? What do they want to do with their savings? Answering these questions are critical to the success of the plan, and often the happiness of our clients. Some couples have even claimed we improved the quality of their marriages, by creating a dedicated time and space to have discussions about money.

There’s Always Room for Improvement

I want to be a great advisor, so I remind myself to keep stretching, to push outside my comfort zone so that I’m never at risk of stagnation. Spreading this message is my passion, because the advisory business needs to evolve. At certain times this industry has not improved as quickly as it should have, but now with ever-greater scrutiny on fees, successful Canadians are looking for support that’s newer, fresher – and more compelling than what they’ve received in the past. 

One final note: while listening is key, it has limits. Clients are not experts, and sometimes don’t know what they are looking for. I always think of Henry Ford for inspiration; when people wanted faster horses, he gave them cars. Similarly, we must stay one step ahead of clients’ expectations to demonstrate our comprehension – and value add

High Conviction in Our Partners

The days when a financial advisor like myself spends the majority of their time picking stocks and bonds is past. If you want to choose individual assets then you’re not going to have a practice that looks anything like mine. You’re not going to have a deep focus on relationships. You’re not going to have time to look at the big issues in clients’ lives.

We outsource the investment management side of the business through solutions like BMO Global Dividend Fund, which holds a collection of stocks that not only pay generous dividends, but also grows them over time. We have high conviction in the strategy, with its focus on big, global gorilla-style companies that will endure – today, and in the future. It is run by a great portfolio manager who we meet regularly to discuss the holdings, and it’s purposefully designed to obey two critical rules of investing: One, don’t lose money. Two, read rule number one.

To learn more, browse our Enhanced Estate Planning resources, or for other ideas to enrich your practice and add value for clients, contact your BMO Regional Sales Representative.


Also in the January 2020 Issue of Insights:

Standing the Test of Time: How to Build on Success >
What Macro Environment Should You Expect in 2020? >

1 Seelan, “Sustainable Investing: The Millennial Investor,” Investments & Wealth Monitor, 2019.

2 Morgan Stanley Institute for Sustainable Investing, Sustainable Signals – The Individual Investor Perspective, 2019.

3 Toronto-based research firm Strategic Insight projects that approximately $1 trillion in personal wealth will be transferred from one generation to the next in Canada between 2016 and 2026, with roughly 70% of that in the form of financial assets.

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