Profitable 2011 resolutions

More and more clients are expecting advisors to add value to their relationship. As much as we think picking investment “ABC” over “XYZ’ is adding value, it just isn’t enough especially when markets tank.

We as advisors have to include more not to be viewed as simply “investment salespersons”.

According to the Advisor Group’s annual ‘Dollar & Sense’ survey…

67% of clients want a periodic review of their plan or accounts.

45% would like a retirement/lifestyle plan but the reality is less than 20% have one.

33% of clients want help managing their cash flow but less than 10% receive that support.

Oh yeah, and less than 10% of clients want an IPS.

Confronted with these statistics, we need to ask ourselves…

Do we offer any of these in our practices? If not here is what we can all do to add value to the client relationships we work so hard to nurture.

Hold regular client reviews

This is something you could begin to automate in your practice.

You could take the number of households you have and equally spread them out across each month. Each month create a report of who is due for a review and contact them via email or mail.

In our practice we use ACT as our contact management software and each month it generates reports as to who is due for a review and then it produces a template or form email which is sent out to the client to remind them to contact us and schedule a time.

During our reviews, we see how our clients are progressing towards their goals using our Client Review Kit and Dashboard.

Start setting plans

If we want to add value we have to help our clients create a meaningful and realistic financial and life goals plan that helps them focus on what they really want to achieve.

Life goals planning will take your business to the next level of both professionalism and profitability. As you help a client in this way, you will be even more aware of their investments as well as their insurance needs. For an example, see our Financial Planning Package.

Managing cash flow

I’ve always been surprised how uncomfortable many advisors feel asking clients about their monthly expenses. Clients are meeting with us for our professional advice on retirement, saving, investing, tax, estate planning advice and they also want cash flow planning. So, let’s give them what they want. Once you start uncovering their monthly income and expenses you begin to realize how important it is to be aware of their cash flow.

How can an advisor recommend clients save $800/month to RRSP, $208/month to RESP’s and pay insurance premiums of $300/month if they have no idea how much excess the client has each month? This could put the client in a position of borrowing to implement the recommended plan which would certainly not be beneficial for the client or would even be prudent advice.

When we develop a plan for clients we do a simple cash flow analysis to determine how we can maximize their monthly income to allow them to meet their goals. This allows us to build a plan we know the client can afford to achieve, even if it means pushing back retirement by 5 years. This is where you can add immense value to your clients and they will see you as a true professional trying to help them by doing a thorough and complete financial plan. View our Cash flow Worksheet.

We are in one of the most rewarding businesses out there. We get to help people achieve their goals and we are even compensated to do so but if we are only offering investment advice, we are not giving clients what they truly want.

2011 can be the start of many great things in our industry, I wish you all best of luck in your practice.

Robert Abboud, CFP, PFP, is the co-founder of AdvisorPractice.com, which offers advisors practical solutions to help transition to a financial planning practice and offers a 12 week training program. He is also the author of ‘No Regrets, A Common Sense Guide to Achieving and Affording Your Life Goals’. He has been offering life goals financial plans for over 15 years through his firm Wealth Strategies. Robert is available to speak at conferences and educational days. You can contact him at rob@wealthstrategies.com.