The world of estate planning is changing rapidly, as firms face a smaller client pool and stiffer global competition. But according to Jonathan G. Blattmachr, a speaker at the FAE’s recent Estate Planning Conference, there are ways to navigate the shift and even leverage it. 

Blattmachr, whom the New York Times has called “one of the nation’s most influential estate tax lawyers,” is a principal at Pioneer Wealth Partners.

During his talk, he noted that the need for estate planning isn’t as strong as it used to be. When he first entered the field, he said, “almost everyone had an estate tax problem—neighbors, friends, cousins.” As time went on, however, the estate tax exemption grew, making estate planning relevant to fewer people. The current amount that an individual can pass along to an heir without having to pay federal estate tax is $5.43 million.

What’s more, he said, there’s greater competition to fill basic estate planning needs—namely, drafting wills—with services that may have once been offered only by a law or accounting firm but are now being provided by banks, insurance companies, investment advisers and other nontraditional sources. Even Walmart has gotten into the game: At some Canadian stores, customers can get a will drawn up for $99, a price that Blattmachr said most practitioners would scoff at. It’s also worth noting, he added, that the store’s success comes, in part, from providing a more relaxed client experience.

“Customers feel very, very comfortable at Walmart,” he said, in a way that they might not “walking into an oak office down on Wall Street, where they would feel nervous and think, ‘This will be expensive.’”

With an increasingly globalized economy and greater ease in outsourcing basic work, there’s competition from foreign firms, as well. Further driving competition is the fact that, according to Blattmachr, clients are more informed than ever, especially about price differences between firms, thanks to websites that allow consumers to compare costs for services. This, he said, makes it easier to play firms against each other. If a firm offers a service for $5,000, he said, a client might respond, “Well, John Paul told me he’ll do it for $4,500, and he’s a good accountant.”

According to Blattmachr, billing practices are going to have to change to account for all of this. The fundamental axioms of economics, he said, dictate that prices will need to drop.

However, that doesn’t mean that the end of estate planning services is at hand. Far from it, he explained that reducing prices means that firms “can pick up people who could otherwise not afford” them. Moreover, he said that there are a number of services professionals can still offer that firms should focus on. For example, there will be an advantage to knowing how to work individual retirement accounts (IRA) and life insurance into planning services, as these “are the only place where you can get a true tax-free return. It’s complicated, but it’s there.” He added that asset protection, too, “is a very big deal” that can have good returns for firms.

Moreover, he felt that, with a shrinking pool of clients with estate tax needs, firms would do well to focus on issues relating to elder care. To underscore that point, he brought up a hypothetical client who has an elderly relative who can’t feed or dress himself,and decides that the relative needs to be put in a home. This can be both a complicated and expensive process that requires a skilled professional to act as a guide; even if the client has about $1 million or $2 million stashed away, Blattmachr said, with the cost of nursing homes in New York, he’ll lose all that money in about three years. “Unless weplan,” he added. “If we do, we could salvage maybe $900,000 out of the million.”

He also said that firms are going to need to start paying more attention to marketing and advertising, to emphasize differences between themselves and the competition.

Blattmachr acknowledged that making these changes in order to deal with the new landscape won’t be easy or pleasant, but said there would be little choice—these factors will have to be accounted for if firms want to survive.

“If you don’t like change, you’re going to like irrelevancy even less,” he said.

cgaetano@nysscpa.org