THE FAMILY DYNAMICS OF INTERGENERATIONAL WEALTH TRANSFER Presenter

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THE FAMILY DYNAMICS OF INTERGENERATIONAL WEALTH TRANSFER Presenter Name Bolded, Company Name Not Bolded

THE FAMILY DYNAMICS OF INTERGENERATIONAL WEALTH TRANSFER Presenter Name Bolded, Company Name Not Bolded Conference or Meeting Name Date

Agenda 1 2 3 Where your business is most vulnerable How family dynamics impact

Agenda 1 2 3 Where your business is most vulnerable How family dynamics impact your ability to connect Your plan to minimize risk 2

WHERE YOUR BUSINESS IS MOST VULNERABLE

WHERE YOUR BUSINESS IS MOST VULNERABLE

$70 Trillion will be transferred over the next 25 years Source: Cerulli Report, U.

$70 Trillion will be transferred over the next 25 years Source: Cerulli Report, U. S. High-Net-Worth and Ultra-High-Net-Worth Markets 2019. 4

21 % of your clients will likely experience a wealth transfer in the next

21 % of your clients will likely experience a wealth transfer in the next decade Source: Cerulli Associates, 2018 Advisor Metrics. 5

70 % of heirs plan to change their financial professional when they inherit the

70 % of heirs plan to change their financial professional when they inherit the assets Source: Cerulli Edge, U. S. Advisor Edition Q 12020. 6

Financial Professionals State Wealth Transfer as the Number One Reason Clients Leave 53% Client

Financial Professionals State Wealth Transfer as the Number One Reason Clients Leave 53% Client passed away/beneficiaries left after inheriting assets 33% Client had relationship with another financial professional Client was unhappy with investment performance 25% Client felt fees were too high 20% Client was unhappy with the service provided 20% Respondents were allowed to select more than one choice. Other responses include, "Self-directed investor" and "Client spent investable assets. " Source: Cerulli Report U. S. High-Net-Worth and Ultra-High-Net-Worth Markets 2019. 7

Identifying Your Assets at Risk 3 QUESTIONS TO SHARPEN YOUR FOCUS § How many

Identifying Your Assets at Risk 3 QUESTIONS TO SHARPEN YOUR FOCUS § How many of my “top” clients are in their 70 s? § What is the total assets under management of these clients? § Of those top clients, how many times in the past 12 months have I had an engagement with the spouse or children? 8

HOW FAMILY DYNAMICS IMPACT YOUR RELATIONSHIP WITH CLIENTS

HOW FAMILY DYNAMICS IMPACT YOUR RELATIONSHIP WITH CLIENTS

Today’s Affluent Families are Increasingly “Modern” Today’s affluent families are as likely to be

Today’s Affluent Families are Increasingly “Modern” Today’s affluent families are as likely to be modern families, which means they might be blended families, families with a single parent as the head of the household, or some other nontraditional family structure. No Children 31% Modern 34% Traditional 35% Sources: America’s Families and Living Arrangements, 2013. United States Census Bureau, 2013, UBS Investor Watch survey of affluent (at least $1 million in investable assets) and high-net-worth (at least $5 million in investable assets) investors, 2015. 10

Enduring Conflicts Impact Family Dynamics We conducted proprietary research and commissioned focus groups to

Enduring Conflicts Impact Family Dynamics We conducted proprietary research and commissioned focus groups to elicit feedback from financial professionals’ target audiences. Our focus groups revealed nuances in how different generations, genders and segments choose and work with a financial professional. Baby Boomer Women Millennials Gen X LGBTQ Community High Net Worth 11

Spenders vs. Savers The vast majority of participants in the research self-identified as savers

Spenders vs. Savers The vast majority of participants in the research self-identified as savers and their partners as spenders. IF ONLY MY HUSBAND WOULD STOP SAYING 'WHY DID YOU BUY THAT? ” 12

Security vs. Opportunity Family members often have significantly different investment styles and risk tolerances.

Security vs. Opportunity Family members often have significantly different investment styles and risk tolerances. One participant in the survey noted about her husband: WE HAVE SUCH OPPOSITE VIEWS— HE KEEPS HIS MONEY UNDER THE MATTRESS, AND I’M AN INVESTOR. ” 13

A Reluctance to Talk About Money BOTH MY MOTHER’S AND FATHER’S SIDE NEVER TALKED

A Reluctance to Talk About Money BOTH MY MOTHER’S AND FATHER’S SIDE NEVER TALKED ABOUT MONEY” 14

Are You Fascinated With Financial Markets or Is it an Obligation? I SEE A

Are You Fascinated With Financial Markets or Is it an Obligation? I SEE A FINANCIAL ARTICLE ONLINE WITH A LOT OF JARGON. I THINK TO MYSELF, I SHOULD READ THIS!” 15

Charting Family Dynamics Daniel (primary client) Nora (spouse) Anna (child) Money Habits Saver [1]

Charting Family Dynamics Daniel (primary client) Nora (spouse) Anna (child) Money Habits Saver [1] D N A Spender [10] Risk Tolerance Security [1] A N Opportunity [10] D Communication Style Private [1] D N A Open [10] Financial Markets Fascinated [1] D A N Obligated [10] 16

CULTIVATING RELATIONSHIPS BEYOND THE PRIMARY CLIENT

CULTIVATING RELATIONSHIPS BEYOND THE PRIMARY CLIENT

Increase Loyalty by Extending Relationships § Developing ongoing engagement with spouses, children, and grandchildren

Increase Loyalty by Extending Relationships § Developing ongoing engagement with spouses, children, and grandchildren can increase client loyalty before the wealth transfer occurs. § Focus on the individual needs of each family member—which will be different than the primary decision-maker. § Be mindful of philosophical differences between family members (e. g. , different risk tolerances). Do not weigh one opinion over another. 18

Meet Each Family Member’s Unique Needs Document the entire family and relevant profile in

Meet Each Family Member’s Unique Needs Document the entire family and relevant profile in your CRM systems so you can be proactive in identifying and responding to family needs. § Graduation § Marriage § New child or grandchild § Milestone birthday of client or client’s relative § A new job § Purchase of a home 19

Connect First, Then Have the “Money Talk” Many participants shared the issues they faced

Connect First, Then Have the “Money Talk” Many participants shared the issues they faced when they did not have the “money talk” with their families. When [my mother] passed, we found so many accounts in so many places there was no open communication— I never want to live through that again. ” Our research shows that participants who had already had the money talk with their family felt more at ease with the thought of a wealth transfer. In fact, their experiences were universally positive: We all sat down, had a meeting and went over my parents’ will and accounts. It felt good to know, and gives you a sense of peace. ” 20

CONNECTING ACROSS GENERATIONS AND AUDIENCES

CONNECTING ACROSS GENERATIONS AND AUDIENCES

Each Family Member Has Unique Financial Needs and Values Our focus groups revealed nuances

Each Family Member Has Unique Financial Needs and Values Our focus groups revealed nuances in how different generations, genders and segments choose and work with a financial professional. These insights can help drive conversations around wealth transfer and further develop relationships. Baby Boomer Women Millennials Gen X LGBTQ Community High Net Worth 22

Connecting With Baby Boomer Women § Common financial needs – Has same needs as

Connecting With Baby Boomer Women § Common financial needs – Has same needs as a primary decision-maker, but often expressed more conservative investing style, worry about losing money – Often manage finances separately from their partners – Highly motivated to help their children be successful – Value security and trust much more than their male counterparts § Ways to communicate – Far more wary of financial professionals’ motivations and hidden fee structures – Consider engaging this group about the needs of their children/grandchildren as a key connection point 23

Connecting With Millennials § Common financial needs – 48% of millennials are parents 1

Connecting With Millennials § Common financial needs – 48% of millennials are parents 1 – When/how to purchase real estate – Paying down student loan debt – Surprisingly conservative § Ways to communicate – Data-driven, would like to compare financial performance metrics – Many expect or prefer interactions to be remote and augmented with technology, for example, via video chats or slide show presentations 1 Gartner Consumer Values and Lifestyle Survey, October 2019. 24

Connecting With Gen X § Common financial needs – Saving for their kids’ college

Connecting With Gen X § Common financial needs – Saving for their kids’ college tuitions. – Financially stressed about retirement goals – Supporting their parents (understand elder care options, etc. ) § Ways to communicate – This was the most time-strapped group, so keep things brief – Skeptical—This group deeply understands that forces beyond one’s control can swoop in and change everything – Email and phone calls are utilized, but you may need to be both persistent and understanding of their limited ability to connect 25

Connecting With the LGBTQ Community § Common financial needs – More conscious about the

Connecting With the LGBTQ Community § Common financial needs – More conscious about the need for, and nuances of, estate planning – They feel underserved by the asset management industry § Ways to communicate – Self-reliant when it comes to finances, but open and receptive to guidance – Important that the financial professional’s company is known to be supportive of the LGBTQ community, less important that the financial professional is part of the LGBTQ community 26

Connecting With High-Net-Worth Clients § Common financial needs – Tax avoidance – Preserving their

Connecting With High-Net-Worth Clients § Common financial needs – Tax avoidance – Preserving their accumulated wealth – Ensuring their legacy § Ways to communicate – Interested in their financial professional’s own success – More likely to be interested in carrying their financial professional relationship forward with their adult children, and exploring the potential for the financial professional to play a role in increasing the financial literacy of their children 27

Increase Loyalty by Extending Relationships Use our financial professional tool to create your action

Increase Loyalty by Extending Relationships Use our financial professional tool to create your action plan 1. Identify key at-risk clients, and create engagement targets 2. Chart the family dynamics to better understand how to connect 3. Learn more about each family member to identify opportunities to engage 4. Go to troweprice. com/familydynamics for more resources. 28

Important Information This material is provided for general and educational purposes only, and not

Important Information This material is provided for general and educational purposes only, and not intended to provide legal, tax, or investment advice. This material does not provide recommendations concerning investments, investment strategies or account types; and not intended to suggest any particular investment action is appropriate for you. Please consider your own circumstances before making an investment decision. Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price. The views contained herein are as of the date of this presentation and are subject to change without notice; these views may differ from those of other T. Rowe Price associates. All investments are subject to risk, including the possible loss of principal. T. Rowe Price Investment Services, Inc. © 2020 T. Rowe Price. All rights reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the bighorn sheep design are, collectively and/or apart, trademarks of T. Rowe Price Group, Inc. 29

THANK YOU CCON 0052041 202003 -1100029 6/20

THANK YOU CCON 0052041 202003 -1100029 6/20