A New Reality for Advisors: Responding to the Death of Clients

Posted by Joni Youngwirth

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August 30, 2017 at 1:30 PM

responding to the death of clientsIn a sign of changing times for our industry, the oldest baby boomers reached age 70 in 2016. What does this mean for financial advisors? Over the next decade and beyond, it’s likely that you’ll find yourself attending to the needs of grieving survivors, as well as responding to the death of clients. Do you have a plan for how your firm will deal with this new reality?

How Should Your Firm Respond?

How your firm chooses to respond to the death of a client depends on a number of key variables, including: 

  • The number of households you manage
  • Your office location (e.g., a major metropolitan area or a small, tight-knit community)
  • Your business model (Ensemble firms tend to need a more consistent approach.)

Some of you may travel a great distance to attend a funeral, while others may choose to attend only a local ceremony. Many advisors send a sympathy card, flowers, or a fruit basket. Making a donation to a memorial organization identified by the family is also an option. Occasionally, doing nothing may be appropriate as well.

Be aware of personal preferences and community expectations. However you decide to respond, be sure to keep personal preferences and community expectations in mind. For example, one advisor from a small town told me that her absence at a client’s funeral would be conspicuous. Another explained, “When we hear of a client’s passing, we pause and assess the closeness of the relationship so we respond in an authentically appropriate way.”

For those clients who are particular favorites of the firm, one advisor takes a moment at staff meetings to acknowledge their passing and note the contributions the firm has made to the individuals and their families. But I've also spoken with advisors on the other end of the spectrum: one firm with hundreds of households in a metropolitan area acknowledged that they sometimes didn’t know when a client had passed away.

Provide value to the survivors of the deceased. Often, you may find yourself helping a spouse who was not involved in managing the family’s wealth and is suddenly thrust into a new role. Even more challenging are situations where the couple had never signed a power of attorney or financial proxy documents. It's likely that the more sudden the passing of a client, the more time you will need to spend with the surviving spouse and/or family. Indeed, most firms I speak with noted being more acutely affected when the loss was unexpected, due to sudden illness or accident.

Do You Have a Bereavement Plan?

Elisabeth Kübler-Ross, author of On Death and Dying, described the five stages of grief as denial and isolation, anger, bargaining, depression, and acceptance. While we instinctively want to make the pain go away, the reality is that we can’t go around the grieving process; we have to go through it.

If your firm hasn’t experienced the loss of a client, you’re lucky. But that doesn’t mean you shouldn’t prepare for this unfortunate—and inevitable—event. So, what should you think about when putting together your own bereavement plan? Here are some considerations: 

  • Schedule extra time for the first meeting with a surviving spouse—just to listen.
  • Set reminders to check in regularly (e.g., monthly) with survivors over the next 6 to 12 months to see how they are doing. Keep in mind that grief can lead many to neglect their own health or become isolated.
  • Create a list of local organizations that provide support to surviving spouses or family members, and make it available to your clients.
  • Establish a standard for how all advisors and staff in your firm should interact with the family and whether they will attend calling hours or funerals.
  • Offer clients a checklist of things an executor should be aware of and the possible steps needed to handle the probating of the estate. 
  • Document your bereavement policy in your employee handbook to set expectations for everyone in the firm.

Be Consistent

Of course, everyone deals with loss differently. Some shut down, while others become overly empathetic. But by keeping your responses deliberate, thoughtful, and consistent, you and your staff can provide the level of support survivors need in their time of grief.

Does your firm have a bereavement plan in place? How have you responded to the death of a client? Please share your thoughts with us below.

Editor’s note: The original version of this article, “How advisers can best deal with the death of a client,” appeared on the InvestmentNews website on September 23, 2016.

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