Estate Planning Seminars: $10M AUM Retained from At-Risk Clients

Estate Planning Seminars: $10M AUM Retained from At-Risk Clients

Executive Summary

Montgomery Retirement Solutions faced a growing concern: pre-retirees contemplating moving their assets due to estate planning anxieties. By hosting complimentary estate planning seminars led by local legal experts, Montgomery addressed these anxieties head-on, providing valuable information and fostering client loyalty. As a result, they successfully retained $10 million in AUM from clients previously identified as high-risk for attrition, demonstrating the power of proactive client education and targeted service offerings.

The Challenge

Montgomery Retirement Solutions, a thriving RIA managing over $250 million in assets, noticed a disturbing trend: increased client attrition amongst those approaching retirement. Exit interviews and client surveys revealed a common thread – anxiety surrounding estate planning, wealth transfer, and potential tax implications. Clients expressed concerns about:

• Estate Tax Uncertainty: The ever-changing landscape of estate tax laws left many feeling vulnerable, unsure of how much of their hard-earned wealth would be passed on to their heirs. Specific examples included worries about exceeding the federal estate tax exemption, currently at $12.92 million per individual for 2023, potentially subjecting estates to a 40% tax on the excess.
• Lack of a Clear Plan: Many clients admitted to not having a comprehensive estate plan in place, citing procrastination and a lack of understanding of the complexities involved. This uncertainty led to fears about potential probate battles and inefficient wealth transfer strategies. One client, Mrs. Johnson, confessed to having over $750,000 in jointly held assets with her husband, a situation that could lead to unintended consequences upon the first spouse's passing.
• Inadequate Asset Protection: Concerns about potential lawsuits, creditor claims, and long-term care expenses loomed large. Clients worried about losing a significant portion of their assets to unforeseen circumstances, impacting their ability to provide for their families and leave a lasting legacy. One client, a physician with over $2 million in assets, expressed significant concern about potential malpractice claims jeopardizing his family's financial security.
• Complexity and Cost of Legal Services: The perceived complexity and expense associated with hiring an estate planning attorney served as a barrier for many clients. They were unsure where to start, who to trust, and how much it would cost to develop a robust estate plan. On average, clients believed comprehensive estate planning (including wills, trusts, and powers of attorney) would cost upwards of $5,000, causing them to delay or avoid the process altogether.

Montgomery Retirement Solutions identified a critical need to address these concerns proactively. Their analysis revealed that approximately 10% of their AUM, or $25 million, was at risk of attrition due to these anxieties. Of that $25M, internal data indicated that the largest risk was concentrated within 25 clients. Losing even a fraction of that at-risk AUM would significantly impact their revenue and growth trajectory. They needed a solution that was both effective and scalable.

The Approach

Montgomery Retirement Solutions decided to tackle the problem head-on by offering complimentary estate planning seminars. The core strategy revolved around:

1. Identifying High-Risk Clients: Using their CRM data and client segmentation, Montgomery identified clients approaching retirement (within 5-10 years) with assets exceeding $500,000 and lacking a documented estate plan. This group was flagged as high-risk for attrition due to the anxieties outlined above.

2. Partnering with Local Estate Planning Attorneys: Montgomery forged strategic partnerships with three reputable estate planning attorneys in their region. These attorneys were selected based on their experience, expertise, and commitment to client education. The attorneys agreed to present at the seminars in exchange for potential referrals.

3. Developing Compelling Seminar Content: The seminar content was carefully curated to address the specific concerns raised by clients. Topics included:

   • Understanding Estate Taxes (Federal and State)
   • Wills vs. Trusts: Choosing the Right Strategy
   • Asset Protection Strategies for Retirement
   • Planning for Long-Term Care Expenses
   • The Importance of Powers of Attorney and Healthcare Directives
   • Strategies for Minimizing Probate Costs

   The presentations avoided overly technical jargon and focused on providing practical, actionable advice. Real-life case studies were used to illustrate key concepts and demonstrate the importance of proactive estate planning.

4. Promoting the Seminars Effectively: The seminars were promoted through multiple channels, including:

   • Email marketing to high-risk clients and their families.
   • Direct mail invitations to select clients.
   • Announcements on the firm's website and social media channels.
   • Personal phone calls from advisors to encourage attendance.
   • Leveraged the attorney's marketing channels to further promote the event.

5. Following Up and Nurturing Leads: After each seminar, attendees received follow-up emails with:

   • A recording of the presentation.
   • A summary of key takeaways.
   • A special offer for a complimentary consultation with one of the partner attorneys.
   • A personalized invitation to schedule a review of their financial plan with a Montgomery advisor.

   The goal was to nurture leads and convert seminar attendees into clients or deepen existing client relationships.

6. Addressing Objections: The advisors were trained to address common objections clients had about estate planning, such as cost, time commitment, and complexity. They emphasized the long-term benefits of having a comprehensive plan in place and offered to help clients navigate the process.

Technical Implementation

The implementation involved several key technologies and processes:

• Eventbrite: Eventbrite was used to manage seminar registration, track attendance, and collect attendee information. Custom registration forms captured data on clients' specific estate planning concerns.
• CRM Integration (Salesforce): Eventbrite was integrated with Montgomery's Salesforce CRM. This allowed for seamless transfer of attendee data, automated follow-up emails, and lead scoring based on seminar attendance and engagement.
• Marketing Automation (HubSpot): HubSpot was used to automate email marketing campaigns, including seminar invitations, follow-up emails, and personalized newsletters.
• Financial Planning Software (eMoney Advisor): Advisors used eMoney Advisor to model the impact of different estate planning strategies on clients' financial plans. This allowed them to demonstrate the potential benefits of proactive planning in terms of tax savings, wealth preservation, and legacy planning. The financial planning software was leveraged to show clients the impact of estate taxes on their wealth; for example, modelling the impact of a 40% estate tax on assets exceeding the $12.92 million exemption.
• AUM Retention Calculation: AUM retention was calculated by tracking the movement of assets from clients identified as high-risk before the seminars to after a 90-day follow up period. Clients who attended the seminar and retained their assets within Montgomery Retirement Solutions were considered retained.

Results & ROI

The estate planning seminars proved to be a highly successful strategy for retaining at-risk clients:

• $10 Million AUM Retained: Montgomery Retirement Solutions successfully retained $10 million in AUM from clients who were previously identified as high-risk for attrition. This represented a significant return on investment, considering the minimal cost of hosting the seminars.
• Improved Client Satisfaction: Client satisfaction scores increased by 15% among seminar attendees, indicating a higher level of engagement and loyalty.
• Increased Referrals: The seminars generated a 20% increase in client referrals, demonstrating the power of word-of-mouth marketing.
• Higher Client Engagement: Seminar attendees were 30% more likely to schedule regular financial planning reviews and implement the recommendations provided by their advisors.
• Reduced Attrition Rate: The overall attrition rate among pre-retirees decreased by 8% following the implementation of the estate planning seminar strategy.
• Cost Savings: The estimated cost to replace $10 million AUM via new acquisition was far higher than the cost of running the seminar series. Estimates showed acquiring this AUM via marketing and business development would have cost $50,000 versus the approximately $5,000 spent on the seminar series.

Key Takeaways

For other RIAs and wealth managers looking to implement similar strategies:

1. Proactive Education is Key: Addressing client anxieties and providing valuable information through educational seminars can significantly improve client retention.
2. Strategic Partnerships are Essential: Collaborating with local professionals, such as estate planning attorneys, can enhance the value of your services and expand your reach.
3. Data-Driven Approach: Identify high-risk clients using CRM data and client segmentation to target your efforts effectively.
4. Consistent Follow-Up is Crucial: Nurture leads and build relationships through consistent follow-up and personalized communication.
5. Quantify Your Results: Track key metrics, such as AUM retention, client satisfaction, and referral rates, to measure the ROI of your efforts.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors proactively identify at-risk clients and personalize engagement strategies to improve retention. Visit our tools to see how we can help your practice.