Five Tips to Increase Advisor Worth

By Richard Rawlins, CFP^®

Helping your clients make strategic decisions in regards to their wealth as life brings change is where your true value will be demonstrated over time.

Be prepared to make a midcourse adjustment.

Wealth management is not a “set it and forget it” discipline. We lay out strategies but must be prepared to make mid course adjustments as changes take place with careers, feelings and family dynamics. The key is to keep the lines of communication open. Regularly discussing your clients’ specific financial needs allows you the opportunity to make a mid course adjustment. Being prepared to make mid course adjustments will be incredibly important to managing the distribution phase of our client’s lives. As they create the necessary cash flow to fund their retirements, having a financial advisor as their partner to know when to make portfolio decisions and which accounts to draw from will be a key factor to success or failure.

Be thoughtful about your clients’ future.

Avoid planning wealth management strategies by default. The most common “default” wealth management decisions are related to family risk management; more specifically life insurance or long term care. By simply educating the client on the risks involved that can be mitigated with appropriate insurance solutions and the option to retain or transfer the risk, a decision can be made thoughtfully rather than by default (i.e. not learning and not making a conscious decision). Most Americans associate long- term- care insurance to nursing homes rather than understanding long-term -care insurance provides choice and independence in the event it is needed.

Enhancing your industry and product knowledge is a competitive advantage.

Leverage your resources, like product sponsors and specialists, at your broker/dealer to stay current. For example, by being aware of various client account registration options that can be used to strategically benefit your clients’ pursuit towards a specific objective such as an education or retirement legacy. Another example is revocable living trusts – when is it appropriate to use that type of account? What is the difference between UGMA and UTMA or using a 529 Plan? Your knowledge of which account registrations will best meet the clients’ intentions adds value to your services.

Perform beneficiary reviews regularly.

Annual beneficiary reviews will help you and your client ensure the proper allocation of their assets. At a minimum, reviews should include all retirement accounts, insurance policies, wills and trusts. Avoid unintended consequences such as leaving out children or ex-spouses receiving windfalls.

Be aware of qualified plan rollover options.

Oftentimes, when a client has left a company, they take cash distributions because they do not have a comprehensive understanding as to what they can do with their plan. You can help your clients make the right decisions with their rollover by actively inquiring about any job changes or outstanding qualified plans from previous jobs.

Many of our most successful financial advisors make their clients review meetings mandatory. Keep a list of wealth management questions that you will ask each and every client when you meet for their portfolio review. By reviewing your clients’ current situation, you can identify recent changes in their personal and work life and discuss any changes to their objectives. You can ask about their horizons; what do they foresee happening? You also have the opportunity to inquire about their feelings regarding the current market or economy. You can open the door to talk about any recent changes in family dynamics – how are their parents? What are their kids up to? Recurring meetings should not be as much about the short term performance of an account as much as a venue to broaden the discussions to other wealth issues.

This approach will help you clarify to your clients that your value is not measured by their quarterly statements; your value is measured over their lifetime and into the next generation. Remember, helping your clients make strategic decisions in regards to their wealth as life brings change is where the value is in your role as their financial advisor.