For those of you who were fans of HBO’s blockbuster series, The Sopranos, here’s a little irony mixed in with a cautionary tale. James Gandolofini, the Emmy award winning actor who portrayed Tony Soprano, dies last year and left a world class estate planning mess which will likely end up costing his estate and his heirs more than $20 million in unnecessary estate taxes.
Ironically, Gandolfini made somewhat of an attempt at planning prior to his death, but may have made similar mistakes that his character actually made in prior episodes of the show. In one episode, Carmela’s cousin Brian, a financial advisor, recommended Tony and Carmela create an Irrevocable Life Insurance Trust (ILIT). In a following episode, Tony met with his CPA (at a race track) and ran the suggestion by him. The CPA shot it down, calling it a “red flag” and went on to recommend a living trust instead so as to avoid “prying eyes” and probate.
Neither advisor recommended Tony and Carmela seek the advice of an estate planning attorney. Sure, the financial advisor and the CPA probably have a basic understanding of estate plans, but comprehensive planning requires collaboration and coordination among all these parties. Had Carmela’s cousin been a true wealth manager, he would have arranged a group meeting with the CPA, financial planner and an estate planning attorney to fully address the complex needs of the family.
Too often, we all work primarily in our silos and the interaction between and among professionals on a proactive basis is rare. The solution to this dilemma is a more deliberate collaborative approach. So how can collaboration help us all serve our clients better and grow our respective businesses?
1. Collaboration fills in the gaps – We all have examples where our work with clients have exposed gaps in their planning. For instance, attorneys routinely discover incorrect beneficiaries on investment accounts. Wealth managers sometimes unwittingly create ill-timed tax events which an accountant might have advised against. A proactive collaboration can illuminate and remedy these gaps before they damage a clients’ well-being.
2. Collaboration adds value – Suppose you had a new referral. In the initial meeting, they ask, “How often do you sit down with my other professionals – my accountant, my insurance person, my attorney, my wealth manager – and review my situation?” Whether it’s an annual phone conference or a brief meeting, collaboration brings true value to your client relationships and keeps everyone current.
3. Collaboration creates more business for everyone – When clients are part of a truly collaborative process where their needs are addressed on a comprehensive and proactive basis, where are they likely to refer their friends, colleagues, and other centers of influence?
4. Collaboration makes clients sticky – Once a client experiences the benefits of a collaborative approach, they are less likely to seek out services elsewhere. In fact, the mere thought of “going backward” is, well, unappetizing.
5. Collaboration makes you different – In a world of competitors who practice in vertical professional silos, those who work in coordinated horizontal fashion across the client relationship stand out – in a good way.
One of our trusted industry advisors, Loring Ward, recently brought financial advisors, CPAs and estate planning attorneys together to share insights. This white paper highlights some of those findings: Developing Stronger Relationships with Centers of Influence (COIs).
Next week, we’ll share our own white papers on this topic.