What Should Clients Do After Getting a Large Settlement?

Logically, they should preserve the money or put it to work providing an income for the future. How involved should you be? How involved do you want to be?

1. Does your firm offer financial planning services? If you work with a large firm, this might be an option. If your client is happy working with your firm, you might make the appropriate introductions. Bear in mind the client should understand they have choices.
2. Private banking. Many large banks have a division or arm’s length business providing financial services to HNW and UHNW individuals. Ideally you want this to be a firm that acts as a fiduciary, putting the interests of the client first.
3. Financial planners. This category would also include financial advisors. Ideally the person helping them is a known quantity with the appropriate credentials. There are over 104,000 financial professionals holding the Certified Financial planner credential. See, CFP Board, “CFP Professional Demographics.”
4. Accountants. Your client might feel financial advisors are salespeople, regardless of the certifications they hold. They want a professional with a fiduciary relationship with their client, similar to yours. For financial planning advice, you might refer them to accounting firms or CPAs.
5. Annuities. Sometimes a client gets structured settlement, paying them over time. In some situations they would benefit from an income steam similar to a paycheck. Annuities, which are an insurance product are often involved. These are bought through an insurance company, usually though an agent.
6. Estate planning. Your client might be in good financial shape but wants to preserve their settlement as a legacy for future generations. Your firm likely has trust attorneys who can help in this area.
7. Special needs trusts. If a family member has a disability, a special needs trust might be the right vehicle. Since this is drawn up with legal documents, you or your firm might be able to continue helping your client.

When referring a client to another professional, you should first ask yourself, “What could possibly go wrong?” You never want to create the impression you are directing business to your brother-in-law. The client needs to make the choice. For example, if you are referring to a financial planner, you might suggest three individuals with whom you have personal experience. Hand them business cards. Ask them to reach out and interview them, then make a choice.