Clients and prospects often don’t have a comprehensive understanding of the value advisors provide, so they may resist financial planning. To get their full buy-in, this advisor uses a great one-page graphic—and an informative monthly column.
According to a report released this year by the CEB TowerGroup, 68% of high-net-worth clients do not have a formal financial plan. Yet—according to the same report—goals-based planning is the service clients desire most.
We created the chart above on the morning of a meeting with a prospective client so that we could include it in his meeting kit and show on one page the number of things that we, as advisors, would do for him throughout the year. (Click the image to see a full-size chart.)
After about 15 minutes of pleasantries and getting to know one another, the prospect pulled the chart out of his kit, and we spent over an hour discussing it! The prospect said that the items on the chart were all of the things that were on his mind—it was a relief to see we could help him with more than just investing.
He went on to explain that he had met with an advisor at Fidelity and was offered investment management services for a 50-basis-point management fee, but the value-added services we offered more than justified the quoted 1.18% fee.
The prospect continued to repeat that he had met with or talked to many advisors about the comprehensive services they offered, but nobody was able to clearly articulate and communicate the things that they would do for him and his family every year. Until now. The chart did that for him.
Increased client engagement
Our clients receive an agenda two days prior to their meetings, which we now send out with the Financial Future chart attached. The very first client we met with after sending the chart brought it with her to our meeting—filled with circles and highlights!
The client said how happy she was that we put something like this together. In reviewing the chart, she had come up with so many questions about things that she didn’t even realize she should be considering. Our regular meeting agenda went to the side as we reviewed all of her questions about planning topics.
Upping the communication level
To further engage and show value to our clients, we decided to transform the Personal Finance Corner feature into a monthly newsletter: The Monthly Planning Letter.
Every month we write about a different planning topic and provide actionable steps for our clients to take. We now distribute The Monthly Planning Letter on the first Thursday of every month via email. We also attach a copy of the month’s planning letter to our weekly newsletter and post it on our website.
The Monthly Planning Letter editorial schedule
Every month we write about a different planning topic and provide actionable steps for our clients to take. We now distribute The Monthly Planning Letter on the first Thursday of every month via email. We also attach a copy of the month’s planning letter to our weekly newsletter and post it on our website.
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January—Budgeting month
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February—Tax month
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March—Retirement planning
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April—Security and insurance planning
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May—Young investors
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June—Summer savings
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July—Emergency preparedness
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August—Back to school
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September—IRA checklist
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October—Credit
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November—Beneficiary and estate planning
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December—Year-end planning
We released our first planning letter in October and addressed the topic of credit. One week after releasing the newsletter, we received three calls from clients thanking us for listing the actionable steps to monitor and even improve their credit. One of these clients had even ordered her credit report and found two items improperly reported.
During November, one of our clients printed the November planning letter and brought it to her portfolio review meeting. The client explained that revising her estate plan had been on her mind for over a year but she felt overwhelmed and did not know where to start.
After reading our planning letter, she reviewed the beneficiaries of her employer-sponsored retirement plan and an annuity held away from our firm. She explained that she now understood what “per capita” and “per stirpes” meant and that her named beneficiaries were not consistent with her intended wishes. She has subsequently updated all of her beneficiaries and engaged an attorney to revise her estate plan—value added for another client!
The value of financial coaching
Wealthy clients want more than investment management—they want comprehensive financial planning. Clients need an advisor who can act as their financial quarterback by helping them to understand their retirement plans and estate planning needs and coordinate with their legal and tax professionals.
As advisors, we must add value for our clients and clearly communicate the services that we offer beyond investment management. We have already taken small steps to communicate our value and, throughout 2015, we will be building on these conversation starters to address the planning needs of each of our clients.