The 529 bridge — How college savings plans can help you reach the next generation of clients

Your clients are more than just customers. As you work with them, you develop a close relationship with the family, and you strive to make that family’s future financially secure.

But the next generation may seek financial advice elsewhere. Research by Investment News, for example, found that 66 percent of adult children don’t keep the same advisor as their parents. A lot is at stake, with some estimates showing that more than $30 trillion could be transferred from the baby boomer generation to younger generations over the next few decades.

You want to retain the next generation as clients, but you may wonder how the dedication, trust, and rapport you build with your clients and their families can help you do that.

Introducing your clients to a 529 plan for their children can help you engage the next generation and retain them as clients going forward. Helping your clients set up and contribute to an account to invest for their children’s college costs can generate goodwill with every generation in the family.

How can you talk to your clients about starting a 529 plan for their children?

The key is to start early. Invite your clients to bring their children to a meeting where you discuss what their parents are doing with their 529 account.

  • Discuss why higher education is so important and why they should start saving now.
  • Show them Bureau of Labor Statistics data on the higher earning potential for people who have college degrees. This will not only instill in the children the expectation that they will attend college and earn a degree, but it allows you, as the advisor, to start building a personal relationship with them.

In addition, if your client is a grandparent saving for a grandchild, you could have the opportunity to develop relationships with three generations of clients. Consider adding the parent as a successor owner to the 529 account and bring the parents, along with the beneficiary, to a meeting where you can discuss a 529 plan.