Once a real estate agent advises a client of the biggest investment they’ll ever make, why stop there?
That’s the thinking behind an initiative by Keller William to train its brokers to offer real estate planning and other wealth management services.
The Austin-based firm has launched its KW Real Estate Planner class, which aims to provide the training, certifications and networking necessary to provide broader financial advice to homeowners.
Dan Ihara, the creator and director of the program, came up with the idea as a way to provide estate-planning services to average homeowners who may not otherwise think they might need advice on wealth inheritance. For many older adults, their home is their most valuable asset, and some worry about navigating the process of passing their property down, he said.
“They’re concerned about their kids being able to manage their property: ‘My kids aren’t trained in how to build and transfer wealth,'” Ihara said.
The idea is partly to capitalize on the existing relationship of trust that a real estate agent builds with a client by broadening it to other family members and into other financial services.
“This model is very relational, so I get deep with their families, and they tell me everything. I am here to bring a very holistic approach to serving this person,” Ihara said. “We educate the next generation on compounding values, we show them how to build wealth. Many of them are still renting and that generation is very ‘spend everything you make,’ so we use the foundation of building wealth.”
The first class of KW Real Estate Planners consisted of about 130 trainees, according to Ihara, and over 200 agents have applied and been approved so far.
“The ultimate goal is that the world sees the KW real estate planner as a consultant vs. a transactions real estate agent,” Ihara said. “It’s to elevate our agents to the ‘real estate planner’ phase from ‘real estate agents’.”
The program can be seen as a bit of a hedge for agents heading into a more challenging housing market.
“As the housing market continues to shift, we’re leaning heavily into the value of business communities to enable our real estate entrepreneurs the opportunity to thrive,” said Sajag Patel, chief operating officer of KW.
The initiative also opens up a side business for the firm itself, which has patented the “real estate planner” concept. So if the idea catches on, and other firms and outside agents want to jump on the bandwagon, they’ll owe KW a fee.
Certification requirements for financial planners vary by state, but in regulation-shy Texas the barrier to entry is relatively low, which could create some risks, according to some pure-play financial advisors.
“Frankly, this industry is a really easy industry to get into — debatably too easy,” said Jim Crider, CEO of San Antonio-based financial planner Intentional Living FP.
The danger, he said, is that insufficiently trained “real estate planners” may squander the trust they built up as agents if they overreach in their new role as financial planners.
“You’re going to have to equally marry that trust with good communication,” Crider said. “Make sure they don’t get over their skis.”
KW points out that the program allows agents to offer strictly real estate planning, not other financial services.