When heirs become clients: the operations side of keeping the next generation
When a client's heirs inherit and may become clients, a small RIA should treat each heir as a new relationship: a fresh introduction and onboarding, their own advisory agreement and brochure delivery, their own IPS based on their goals rather than their parent's, and a household set up for them. Record the conversations from the start, and keep the inherited accounts on hold or on the existing strategy only as long as authority and the agreements allow.
A long-standing client dies, and three adult children inherit. The advisor has met one of them, once, at a review years ago. Within a few months, two of the children have moved the money elsewhere. Nobody did anything wrong. The firm simply had no relationship with the next generation, and no plan for the moment it was needed.
What does each heir need set up?
| Step | Why |
|---|---|
| An introduction meeting about them, not the estate | They're choosing whether to work with you |
| Their own advisory agreement | Your authority to manage their accounts |
| Brochure delivery | A new client gets the brochure at or before signing |
| Their own household and contact details | They're a separate relationship from the parent |
| A new IPS based on their goals | Their horizon and risk tolerance aren't their parent's |
| A decision on billing grouping | As the new agreement says |
What should happen before anything happens?
- With the client's permission, meet their children or main beneficiaries once.
- Record who they are, how to reach them, and the client's wishes about introductions.
- Note the beneficiaries on file for each account, as the custodian holds them.
During the transition
- Follow your first-day steps when a client dies: holds, scheduled withdrawals, billing review.
- Act only on documented authority until the accounts are retitled or transferred.
- Meet each heir about their own plans, separately if they prefer.
- Onboard those who choose to stay as new clients, with their own agreement and IPS.
- Record every conversation and decision on the right household.
A worked example
Take a hypothetical two-person RIA. Years before, with the client's agreement, the advisor met her two children at a review and noted their contact details. When she dies, the firm follows its checklist, holds her individual accounts, and meets each child within a month. One decides to stay: she gets her own agreement, brochure, household and an IPS reflecting her twenty-year horizon. The other moves elsewhere, and the firm helps the transfer go smoothly and records it.
What are the common gaps?
- Never having met the next generation.
- Assuming the heir will keep the parent's strategy.
- Managing an heir's money without their own agreement.
- Conversations with the family recorded nowhere.
When is this overkill?
It isn't, for any client with beneficiaries. The introduction meeting alone changes the odds.
How Advorra fits
Advorra keeps households, members, communications and trade holds on one record, with a prospect pipeline for new relationships and IPS documents that fill from each client's own strategy, so an heir can be set up as a new household with their own records. See the product page, or read about when a client dies and the client onboarding checklist.
One thing to do this week: list your five oldest clients and whether you've met anyone from the next generation.
An operations guide, not legal, tax or compliance advice.
Questions advisors ask
Do heirs automatically become our clients?
No. Each heir chooses whether to work with you, and needs their own agreement before you manage their accounts.
Can we keep managing inherited accounts during the transition?
Only as far as your authority and agreements allow. Confirm with the custodian and your compliance consultant, and record what you decided.
Should the heir keep the parent's strategy?
Not automatically. An heir's goals, horizon and risk tolerance are usually different. A new IPS based on their circumstances is the usual step.
When should we meet the next generation?
Ideally before anything happens, with the client's permission. A simple introduction meeting makes a later transition much easier.
Is this legal or tax advice?
No. It is an operations guide. Estate and tax questions belong with the family's attorney and tax adviser.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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