Eighth Annual Industry Trends Survey Key Findings
A LOOK INSIDE THE ESTATE PLANNING INDUSTRY
Content
Overview
2
RESPONDENT PROFILE Location
Professional status
3 3
PRACTICE PROFILE New services offered
Revenue
4 6
CLIENT PROFILE Client profile
Client concerns
5 5
BUSINESS PRACTICES AND TOOLS New client generation
Time spent on new client generation
Business tools
Continuing education
Topics of interest
Summary
2
6 6 7 7 7 8
Overview
It has been a big year for trusts and estates attorneys and the 8th Annual Industry Trends Survey illustrates areas of growth and challenges the industry faces. The survey addresses changes from legislation, client demographics, education requirements and desires for estate planners and their staff, business goals, and communication methods. The field (and opportunity) is growing— estate planning services have increasingly become a major source of business revenue for respondents. Last year, 48% indicated estate planning services were a majority of their business; this year, the number has exploded to 72% of respondents who indicate estate planning generates more than half of their revenue. 70% of respondents base their pricing on flat fees for the service provided and 62% of respondents saw their practices grow from 2013 to 2014. The post-ATRA environment, with tax exemption limits and added portability, has many attorneys adapting their practices. The majority of attorneys expanded their offerings or added services: specifically in the areas of trust administration, elder law, and non-tax trust planning. On average, responding attorneys spend one to four hours per week developing their client base. Existing client referrals and professional network referrals are the primary methods for generating client business; seminars, workshops for prospective clients, and marketing/advertising are used to a much smaller extent.
Respondent Profile
PACIFIC 20%
NEW ENGLAND 5%
GREAT LAKES 15%
MIDWEST 13% MOUNTAIN 17%
MID-ATLANTIC 9%
SOUTH ATLANTIC 14%
SOUTH 7%
LOCATION Our respondents are spread out across the United States.
Professional Status For the purposes of this survey, respondents must indicate that they are an attorney, currently practicing trusts and estates law. Nearly half of respondents have been practicing trusts and estates law for more than ten years, while 22% have been practicing T&E law for less than 2 years. How long have you been practicing trusts and estates law?
100%
27%
20+ years
PRACTICING ATTORNEY 22%
11 to 20 years
3% CPA/ACCOUNTANT
2%
INSURANCE PROFESSIONAL
6 to 10 years
3 to 5 years
2%
1%
FINANCIAL PLANNER
OTHER
Less than 2 years
15%
14%
22%
3
Practice Profile
Nearly all respondents indicate their practice focuses on trusts and estates law. A majority also have a focus in other legal areas, but indicate trusts and estates law generates the majority of their revenue.
Practice Area That Best Describes Practice Focus. TRUSTS AND ESTATES
97%
GENERAL PRACTICE/PROBATE LAW 84%
45% 42%
32% 23%
ASSET PROTECTION
BUSINESS SUCCESSION/EXIT PLANNING
39% 35%
}
38%
27% of respondents indicate they serve as a trustee, while 38% serve as a trust protector/advisor.
BUSINESS LAW
Approximately what percentage of your client revenue is generated from services related to trusts and estates?
ELDER LAW TAXATION
22% CHARITABLE GIVING
37%
More than 75%
19% REAL ESTATE LAW 7%
35%
FAMILY LAW
11%
51% - 75%
3% BANKRUPTCY LAW
17%
Less than 25%
26% - 50%
New Services Offered
What services do you newly offer, or what parts of your practice have expanded as a result of the raising of the estate tax exemption limit and adding portability (post-ATRA)? 25% 22% 21% 20% 17%
TRUST ADMINISTRATION
ELDER LAW 84% NON-TAX TRUST PLANNING (PROBATE AVOIDANCE)
ASSET PROTECTION The majority of respondents have expanded their
BUSINESS PLANNING
offerings or have added services as a result of the raising of the tax exemption limit and adding
14%
INCOME TAX PLANNING
portability. Trust administration, elder law and non-tax trust planning are most likely to have
12% 2%
experienced an increase.
BECOMING LICENSED TO SELL INSURANCE AND/OR SECURITIES 6%
4
RETIREMENT PLANNING
OTHER 43%
WE HAVE NOT CHANGED THE SERVICES WE OFFER POST-ATRA
Client Profile
What is the net worth of the clients that you serve?
Respondents serve clients who represent a variety of net worth levels and a variety of ages. A majority of clients, 56%, have a net worth of $1 million or more—this number is up from last year’s 52%, a clear indicator of growing net worth. Respondents indicate that 52% of their clients are between the ages of 50 and 69 (up 1% from last year). A staggering 73% of clients are married with children, either from the same marriage or as a blended family, up 13% from last year.
What percentage of your clients fall into each of the following categories?
6%
$1M - $1.9M
$2M - $4.9M
19%
22%
8% 22%
7% 22%
$500K - $999K
$5M - $9.9M $10M+
Less than $500K
What percentage of your clients fall into each of the following age categories?
Single/No Children
9% Married/No Children
12% Single/Children
25% Married/Blended Families
48%
9%
15%
23%
29%
17%
7%
Under 40
40 - 49
50 - 59
60 - 69
70 - 79
80+
Married/Children
The top three concerns or reasons that cause clients to seek estate planning. 67%
Avoid probate
65%
Avoiding chaos/discord among family/beneficiaries
38%
Protect children from mismanaging their inheritance
25%
Seeks asset protection, either for self or beneficiaries
22%
Minimize estate taxes
16%
Reduce likelihood of estate litigation Concerned with financing healthcare or long term care Business succession and exit planning Provide for a family member with special needs
14% 13% 10%
Provide for a spouse who is incapacitated or terminally ill
5%
Business formation and entity planning
4%
Transferring assets to international beneficiaries
1%
Ensure philanthropic/charitable giving goals are met
1%
Concerned about outliving their retirement
1%
Other
10%
The top three reasons why clients use estate planners hasn’t changed: clients are likely to seek estate planning in an effort to avoid probate (67%), avoid chaos or discord among survivors (65%) or to protect children from mismanaging their inheritance (38%).
5
Revenue Respondents most likely price their services as flat fees based on the service provided. 62% of respondents experienced an increase in revenue fxrom 2013 to 2014.
How do you primarily price your trusts and estates planning services?
Which response best describes the growth of your practice when comparing 2014 revenue vs. 2013?
70% |
Grew more than 25%
Flat fees bases on service provided
17%
16%
Grew 16% - 25%
of flat plus hourly 23% | Combination
7% |
Hourly fees
Grew 5% - 15%
29%
About the same
28%
10%
It declined
New Client Generation There is a growing preference among estate planning attorneys for referrals from existing clients. Up 3% from last year, 86% of attorneys ranked existing clients as one of their top choices. Other popular methods include referrals from their professional network (79%) and hosting seminars/workshops for current and potential clients (13%).
Of the following categories please rank the primary methods you use for generating client business. Referrals from existing clients
46%
Referrals from professional network
Marketing/Advertising 5%
Social Other
8%
11% 13%
30%
6%
24% 14% Total 10% Total 10% Total
FIRST CHOICE
6
39%
40%
Hosting seminars 5%
Lists
40%
SECOND CHOICE
THIRD CHOICE
Respondents are spending more time on new client generation than ever. Attorneys are most likely to spend up to 4 hours per week on acquiring new clients and growing their practice (45%), compared to 52% of the respondents from last year who spent one to two hours per week on the activity.
Business Tools
Respondents use a variety of software and services in their business. Most prefer to use a document assembly software from a legal services company or association over a self-created form. Calendaring and email systems and accounting systems are used by a majority of respondents.
What is your preferred method of document drafting?
}
74%
}
22%
What tools are you using to manage your practice more efficiency?
Document assembly software from a legal services company or professional association 74%
}
Acquired from another source
4%
Forms you create yourself
Calendar and Email systems
94%
Accounting Systems
64%
Practice management systems
43%
Software based system Email marketing systems CRM systems
Continuing Education
32% 20% 14%
Respondents prefer both online and live education events (78% and 71%, respectively) over online news sources and trade publications (24%, 19%).
Preferred sources for staying current on legal education to help you stay current?
47%
78%
Virtual education Live education events in person
Asset protection
71%
Online news sources, blogs
24%
Trust Administration
41%
37%
19%
Trade publications Other
Topics you want to learn more about in the coming twelve months?
Elder law
Business succession
30%
1% 29%
What is most important to you for your continuing education? Compelling and relevant topic and/or speaker, regardless live or recorded
Retirement planning
52%
In-person CLE event with the opportunity to network with peers
44%
Recording I can watch/listen to at my convenience
38%
Cost/affordability
36%
24%
Individual income tax planning
Other
21% 1%
27%
Special needs planning
19%
16%
Participating in a live webinar that fits in my schedule
Legal marketing
Fiduciary income tax planning
Probate
15%
3%
Other
7
Summary The outlook for the trusts and estates industry is promising. Estate planning attorneys devoted more time to attracting new business over the last year and it paid off: 62% of respondents indicated practice growth of more than 5% this past year and 33% grew their practices by more than 16%. And not only are practices growing, they’re attracting wealthier clients: 56% of clients have more than $1 million. With more than half of respondents indicating expanded practice offerings and a convincing majority experiencing growth in their practice revenue, there are solid reasons for continued optimism in the industry into the coming year.
WealthCounsel is a membership-based organization that provides estate and business planning attorneys with legal document drafting software, educational programs and CLE, and nationwide networking opportunities in a community of over 4,000 professionals. Our goal is to help members grow their practices, stay current and confident, and connect with their peers. Visit WealthCounsel.com to learn more about our best-in-class drafting solutions and explore the industry insights, CLE, and thought leadership available to WealthCounsel members in our new online Resource Center at wealthcounsel.com/resource-center. Give your practice every advantage. If you’d like more info on how WealthCounsel can help you achieve even greater success, contact us at (888) 659-4069 #819 or information@wealthcounsel.com.
This work product is the property of WealthCounsel, LLC. Reproduction, distribution, republication, and/or retransmission of the content is prohibited unless the prior written permission of WealthCounsel, LLC has been obtained.