What if there was a quick and easy documented way of assessing whether your clients will have an income gap or excess cash flow when they retire? With the Income Gap Assessment, you will be able to discuss the overall cash-flow based financial plan with your clients and determine ways to guarantee their income in retirement.
We created the Income Gap Assessment to cut down on time spent with each client. This resource will allow you to skip the long budgeting process and get right to the important stuff.
The Bucket Plan® Best Interest Process is an asset allocation system used to develop simple, cash-flow based financial planning methods that your clients will understand. The holistic financial planning process is full of valuable resources.
The Income Gap Assessment is just one piece in a series of turnkey tools and processes available through C2P.
There are four sections:
The first section is where you log the client’s net income after taxes.
This is the current amount being deposited into checking from salary, wages, and other sources of income pre-retirement. You want to determine the difference between their annual bring-home salary and their yearly living expenses.
After you calculate the annual net income, ask the client to choose which of the following scenarios most closely applies to them:
The second section focuses on income gained after retirement. Between Social Security and pensions, what will their fixed income be once they are no longer earning a paycheck?
For Social Security optimization, clients may delay one or both of their benefits. This will leave a larger gap income for a short period of time. In these cases, consider conducting multiple Income Gap Assessments for the different time periods to get an accurate picture of their cash-flow based financial planning strategy throughout retirement.
Another option is to do one Income Gap Assessment as if all fixed income sources are activated. Then, determine the amount of assets you would need to set aside to cover the bridge needed to make up for the delayed income.
You should list anything that might affect retirement income under the increases in expenses section.
Ask your clients about potential increases from income tax increases, health insurance premiums, increased travel expenses, etc.
Tax planning is one of the most significant opportunities wealth professionals have. Clients often view tax planning as their most daunting and confusing retirement expense. You can use their tax returns to find areas where you can save them money and avoid income gaps in the future.
“A competent financial planner can evaluate multiple years of prior 1040s and supporting documents to inform present tax planning decision and identify planning opportunities and areas of concern for the current and future periods.”
– Certified Financial Planner Board of Standards
Next, you should log all major expenses that will decrease after they retire. Will they pay off a loan or mortgage? How much do they have in their savings account?
With these three figures, you can derive the gap income that will need to be taken from liquid investable assets in retirement.
The Income Gap Assessment exercise aims to determine the gap between the net income a client is currently living on while working and the fixed income sources they will have after retirement.
It is based on a consumption methodology of budgeting and will provide an accurate amount that they will need to draw off their liquid investible assets once they retire. This assessment is particularly useful and efficient for clients and prospects who will be retiring in fewer than ten years.
Net Income Need – Fixed income – Adjustments = Total Income Gap
Once you have the final number, you’ll know if the client has an annual surplus or deficit for their retirement. If there is an income surplus, they will have excess cash flow. Knowing this will allow you to act more strategically with their holistic financial plan or cash flow analysis.
The Income Gap Assessment is a viable tool to determine what kind of situation your client may find themselves in once they retire. If you determine the client has a gap income, you should ask them the following question.
“How much of this income gap do you want guaranteed in your financial plan?”
This will serve as a basis for their total income needed in retirement. It also creates an opportunity for you to show them how you can guarantee their income once they retire.
The Income Gap Assessment is just one tool in a series of resources and assets found in The Bucket Plan® Best Interest Process.
The Bucket Plan® Best Interest Process is a proven, turnkey holistic financial planning process for gathering data, documenting findings, and delivering asset-positioning strategies in your clients’ best interest. We have defined, refined, and tested it so businesses of any size can replicate it.
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
The Family Estate Organizer (FEO) is a holistic financial planning tool that handles the process of settling an estate, as well as assisting the family and any professionals involved. The FEO streamlines and organizes all essential personal information and financial documentation into a single comprehensive binder.
There is typically one individual that handles the coordination and organization of the family’s financial life. If something happens to that family member, such as death or disability, the survivors are left unorganized and lost.
The Family Estate Organizer provides a centralized location for all crucial information and becomes a go-to resource for the client and their family. From legal documents to insurance policies to brokerage statements and more, it creates peace of mind for the client and their loved ones.
Having a customized FEO built can save a family a lot of time, energy, and heartbreak after an already devastating loss. An Estate Organizer can accompany the client to the funeral home or attorney’s office, etc.
We’ve all been there. Collecting and organizing an entire lifetime’s worth of documents is stressful and frustrating.
Introducing an Estate Organizer during your first meeting can help show your client the value of holistic financial planning tools and ensure everyone is on the same page.
The FEO covers everything, including:
The FEO combines all the clutter and paper that arises during the resolution of an estate into a single easy-to-follow binder.
When a new couple comes into the office, they’re often overwhelmed by all the paper they’ve accumulated and don’t know where to start.
It’s common that only one of them has been handling the family finances, and the other is clueless.
So, the first step is getting them organized and on the same page so that everyone is speaking the same language. Ensure all parties understand their net worth, cash flow analysis, and basic concepts like the money cycle.
Click here to learn more about financial advisor client communications.
Utilizing the FEO in your first meeting with clients will put their minds at ease and educate them on The Bucket Plan® principles like the money cycle and planning for now, soon, and later.
An Estate Organizer is much more than a simple financial or legal tool. It stores all important client information from investments and pensions to medical information and life insurance, as well as a family succession plan and Survivor’s Checklist that allows the survivors to better handle the estate upon a client’s passing.
The Family Estate Organizer helps wealth professionals to:
This is an all-in-one tool that sets clients up for success and helps you develop rapport with your clients. Click here to schedule a FREE 20-minute call to learn more!
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
Why is cash-flow based financial planning the right strategy?Cash-flow based financial planning is the right strategy because it uses a detailed approach by classifying income as earned or capital gains for tax projections.
When you combine holistic financial planning with cash-flow based financial planning, you get a 360-degree look at the client’s goals without even following a goals based financial plan.
Goals based planning establishes pivotal objectives that lead the financial planner down a strategic path to meet each objective. Many advisors choose this methodology because it is easy to use, and the process takes less time because it focuses on a limited number of high-level goals like the desired age they will retire and income during retirement.
This is not the ideal approach for clients who have various specific financial objectives.
Cash-flow based financial planning takes a client’s current financial position and uses predictions and forecasting to determine their cash flow plans for the short- and long-term future. It gives you more freedom to explore holistic financial planning solutions you might otherwise not consider.
Cash flow plans allow you to create suggestions that take multiple variables into consideration, whereas goals based financial planning makes it difficult to evaluate more complicated circumstances.
At C2P Enterprises, we offer holistic financial planning services that address the client’s gaps and concerns, and we educate advisors on our way of doing things.
A big part of what we do is eliminate sequence of returns risk, but many clients have a hard time wrapping their minds around that. They get overwhelmed if you show them a bunch of technical charts and graphs. We teach them simple holistic financial planning services like the money cycle to simplify things.
Knowledge of the money cycle is critical understanding The Bucket Plan® and how it can set clients up for a secure future. The money cycle includes three distinct phases we all go through in life: accumulation, preservation, and distribution.
No matter what phase your client’s cash flow plans are in, The Bucket Plan® can help.
Accumulation usually starts when you’re a kid. You have a piggy bank or a junior checking account where you put our tooth fairy money, birthday cash, babysitting income, money from mowing the lawn, etc.
This accumulation phase of cash-flow based planning continues into adulthood and throughout our working years as you begin to build your life savings. Perhaps you open a retirement savings plan, and your employer contributes to it as well. Since you have a lengthy time horizon ahead before retirement, you can afford to take more risks with your money during this stage of life.
As you get closer to retirement, you move into the preservation phase. At this point, you’re financially stable and looking forward to winding down your career, effectively ending the accumulation phase on a significant portion of your money. There’s less time to make mistakes or experience major volatility because you’re going to need this money sooner rather than later.
Remember: it’s not about how much money you make, but how much you keep. The preservation phase of cash flow plans is where you can strategically position a portion of your assets to keep them safe yet still, continue growing them to outpace inflation for the future.
The biggest most retirees make is skipping over the preservation phase of the money cycle and going directly from accumulation to distribution.
Most people never preserve a portion of their assets to draw from in that all-important first retirement phase. Instead, they continue to invest all their money as if they were a long way from retirement when in reality, it’s right around the corner. That’s how so many pre-retirees got into trouble back in 2000 and 2008 when the market took nosedives.
The preservation phase is essential for financial stability and peace of mind in retirement. When the market has extensive corrections—as it always does—and you’re forced to take distributions during that time, you are essentially selling your investments for income when the market is down, and you can never make that money back. This leaves you depleting your savings much faster than initially anticipated. You don’t want to risk running out of money later in life.
Finally, the last phase in the money cycle is distribution. Distribution is when you begin to draw from what you’ve accumulated and preserved and start taking an income from your savings and investments. In cash-flow based financial planning, you distribute to yourself in retirement and to your loved ones upon your passing.
At C2P Enterprises, we utilize The Bucket Plan® to help advisors simplify the planning process, money cycle and more.
The Now Bucket is for the client’s safe and liquid money. This is where you set aside sufficient funds for a year’s worth of income if they’re about to go into retirement, an emergency fund, and sufficient money for upcoming planned expenses.
The Soon Bucket is the more conservative money that’s designed for the first ten or so years of retirement, plus an inflation hedge. It needs to be much less volatile but invested so that it outpaces inflation without subjecting it to the direct ups and downs of the stock market.
The Later Bucket is the client’s long-term growth money.
To learn more about the money cycle and how to convert more leads to clients in 3 meetings or fewer, see if you qualify to attend The Bucket Plan® live training.
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
Insurance marketing lead conversion is one of the most challenging tasks to master. How do you generate consistent new business that will continuously flow through the sales funnel while maintaining SEC marketing compliance?
To increase your insurance marketing lead conversion rates, you must first look at your investment advisor marketing efforts.
The goal of marketing strategies for financial advisors should be to guide each prospect smoothly through the funnel from prospect to client.
The first step is to create valuable content to entice online visitors to give you their contact information in order to access the gated content. Be sure to include an SEC marketing compliance review in your content workflow.
Leads continue to move through the buyer’s journey as both the marketing and sales teams qualify them. You continue to provide them with valuable content until they schedule a call or meeting.
Finally, you hand them off to the sales team and let the closers work their magic.
Analytics are critical to understanding what worked well and what can be improved. You can measure your efforts to see your insurance marketing lead conversion results, so you don’t waste your advertising dollars on marketing strategies for financial advisors that don’t provide results.
Are you looking for a growth-minded approach to getting new client references and referrals?
You can target prospects, convert more leads, and turn existing customers into insurance marketing lead conversion sources with the right investment advisor marketing plan.
We’re in the relationship-building business. Successful marketing strategies for financial advisors cultivate more business by delighting existing customers and soliciting referrals from them.
Build strong relationships, but maintain SEC marketing compliance throughout all of your financial advisor client communications.
One way to increase your insurance marketing lead conversion rates is to invest in innovative tech services that will encourage better financial advisor client communications. Technology makes digital marketing possible. It’s important to use social media as a means of sharing information with your audience at the right time, but be mindful of SEC marketing compliance rules.
Develop a responsive lead nurturing email campaign in your customer relationship management (CRM) program. This allows you to deliver customized messaging to your prospects when they need it most. Tailor the messaging and offer to the prospect’s past behavior and interactions with your financial practice.
Most SAAS companies offer free informational resources to their clients. Take advantage of those to get more out of your systems. If you’re unhappy with the technology you’re using, research other software companies and CRMs to see if there’s a better product for you.
Clarity Insurance Marketing is an insurance marketing organization (IMO) that facilitates advanced product screening, selection, and support for all lines of fixed insurance products.
At Clarity Insurance Marketing, we are dedicated to implementing best interest practices that mitigate risks effectively. Clarity Insurance Marketing helps institutions, wealth professionals, and ultimately families nationwide.
To learn more about Clarity Insurance Marketing, lead conversion, and maintaining SEC marketing compliance—Click here for a FREE consultation.
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
The new SEC Marketing Compliance Rule defines advertising as financial advisor client communications made directly or indirectly by the advisor or by compensated third parties, such as paid endorsements or testimonials.
In 2020, the SEC Marketing Compliance Rules that govern investment advisor marketing were updated. The amendments create an SEC Marketing Compliance Rule that reflects market developments and regulatory changes since the advertising rule’s adoption.
The SEC Marketing Compliance Rule is designed to regulate financial advisor client communications.
Whether you are an IAR registered with the SEC or a State, a Registered Representative associated with FINRA, an Insurance Agent or some combination of all three, there are certain rules and regulations that must be followed. Trying to navigate SEC, FINRA, and Insurance Department regulations can be challenging as rules are constantly updated and interpreted differently from firm to firm.
Below we will provide some general guidance on key considerations when creating material, but it is important to work directly with your compliance department to ensure all firm policies and procedures are being followed prior to using the materials.
In some instances, firms prohibit texting, messaging services, social media sites, or collaboration applications (e.g., WhatsApp, WeChat, Facebook Messenger, Slack, or HipChat) for business-related communication with customers. It is important to work with your compliance team to determine what you can and cannot use for business communications and advertisements.
The SEC Marketing Compliance Rule is a modification of Rule 206(4)-1 under the Investment Advisers Act of 1940, as amended, which combines elements of former Rule 206(4)-3 to create a single integrated rule that revolutionizes the regulatory outline of marketing strategies for financial advisors.
Under the general prohibitions, marketing strategies for advisors must not:
Your marketing team and compliance department should work together to develop a robust SEC marketing compliance plan. This will ensure all of the content you produce and share will fall under the SEC marketing compliance parameters.
Our VP of Marketing, Matt Seitz, worked with our in-house compliance team to create an eBook on compliant marketing strategies for financial advisors.
Click here to get your FREE copy.
The new SEC Marketing Compliance Rule went into effect on May 4, 2021, and wealth professionals must be compliant by November 4, 2022.
Update any financial advisor client communications that would be considered advertisements, and get ready to validate any statements of material fact included in your marketing materials.
Rewrite your policies and procedures, especially those that govern financial advisor client communications, social media use, digital marketing, and the use of testimonials.
Regulations change quickly and often, so it is critical that you stay as up-to-date on compliance as you do on investment advisor marketing.
Luckily, there are countless convenient ways to get information to ensure you are keeping up with marketing strategies for financial advisors and compliance trends.
Want to take the guesswork out of compliance? Schedule a FREE 20-minute call to see how C2P Enterprises can help you get proven results!
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
Like most things, investment advisor marketing starts with Google. Building your web presence is the first step toward a robust marketing plan.
Check out these investment advisor marketing survey results:
So, once you’ve built your website and social media channels, what digital marketing tips are next?
How does Google find your site and know to whom to recommend it?
The answer is content marketing.
Content marketing is an inbound marketing practice in which you advertise your business through creating and sharing relevant, informative, and entertaining content. With engaging content and effective lead generation methodologies, prospects will find their way to you over traditional outbound advisor marketing methods.
Content can mean anything from a tweet to an annual report, but some of the most common types include:
The goal of marketing strategies for financial advisors should be to guide each prospect through the sales funnel.
First, prospects give you their contact information to access a piece of gated content you have produced. This takes them from the prospect stage of the buyer’s journey to the lead stage.
Next, leads move further through the sales funnel as both the marketing and sales departments qualify them. You continue to provide them with valuable content and allow them to get to know you and your business better until they feel comfortable enough to schedule a call or meeting.
Finally, you hand them off to sales and let the closers convert them into paying customers.
Don’t forget to measure your results! You can analyze your efforts to see lead generation and conversion results. Metrics are key to learning what worked and what didn’t, so you don’t waste your valuable advertising budget on things that don’t bring in any new business.
One very important digital marketing tip is this: NEVER recommend a particular product or investment to a broad audience.
No matter how targeted you get with your digital marketing, you can never fully control who sees your content, and you don’t want to make blanket statements that won’t apply to everyone.
Each client should receive one-on-one holistic financial planning advice tailored to their specific needs.
You should only suggest strategic investments or specific products after developing a relationship and understanding their individual financial objectives.
Our industry changes quickly, so it is vital that you stay as up-to-date on investment advisor marketing trends as you do market forecasts.
Luckily, there are countless convenient ways to communicate directly with your peers to spread a wealth of knowledge about investment advisor marketing, industry news, digital marketing tips, and more.
Digital marketing is crucial to being competitive in today’s market. But don’t forget to market your business the old-fashioned way, with direct mail and physical advertisements in your local community.
To neglect traditional investment advisor marketing methods is to disengage from your community. Use traditional advisor marketing methods for both lead generation and client retention.
The best laid marketing strategies for financial advisors have a deliberate mix of educational content, diverse media, and personalized client communications.
Lean into acts of goodwill; invest in your community—sponsor a little league team, purchase ad space in small-town newspapers and billboards. People love getting small gifts or greeting cards in the mail. It doesn’t have to be extravagant. Even a simple handwritten thank you note goes a long way in adding a personal touch that other wealth professionals lack.
Become a pillar of your community so that everyone nearing retirement age knows your name.
Click here to schedule a FREE 20-minute call with one of our expert business development representatives to learn more about investment advisor marketing.
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
Recruiting top-quality wealth professionals for your business is similar to acquiring a new high revenue client. It requires that both parties determine whether they are the right fit.
Compensation is one of the main drivers for top performers to decide which financial practice they will choose. While some firms adopt an eat what you kill mentality entirely driven by the revenue generated by the individual advisor’s book of business, other compensation models work to establish growth in more than just a financial sense.
With the state of the current market, where the number of vacancies at firms exceeds the number of wealth professionals looking for new opportunities, firms must work to ensure they stand out above the rest.
While there is no perfect compensation structure for financial advisors, there are compensation models that help attract, retain and incentivize top wealth professionals.
The first question you should ask yourself is: what type of talent are you hoping to attract with this new compensation model?
“Are you building a lifestyle business or are you building a legacy?”
Do you want to bring on hunters who will focus on business development efforts and finding high-net-worth clients?
OR
Do you need someone to cultivate your existing business and build out those long-term relationships while you act as the rainmaker?
Traditionally wealth professionals have used a compensation structure with a percentage of revenue generated from the client, also known as the grid method.
While this was the standard for many years, this model has created a lack of vested interest in the firm’s profit, with advisors concentrating only on their book of business.
Secondly, the compensation model offers a base salary and quarterly stake of company profit.
This model creates a vested interest in the firm’s profit rather than an individual advisor.
While the model does show less turnover, there is usually a lack of immediate gratification due to the quarterly structure.
More recently, many firms have adopted a hybrid compensation model, which offers advisors a base salary, quarterly stake, and monthly variable commission similar to the grid method but only on new revenue produced.
This model helps to motivate business development and encourages collaboration between advisors, paraplanners, and client service associates.
When choosing the compensation model you will employ at your financial practice, remember the model you decide to implement needs to encourage the behaviors you are looking to cultivate. To remain competitive, employers need to analyze their compensation model and ask what behaviors the model looks to reinforce. When companies use an effective compensation structure, it ensures continued company culture and revenue growth.
Want to learn more about attracting and retaining top talent?
Click here to schedule a FREE 20-minute call with us.
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
March is Women’s History Month! There are more women nearing retirement age now than ever before, so it’s time to ditch the boys club and learn how to increase your lead generation by targeting women. At its core, financial planning for women is no different than it is for men. It’s just about understanding their specific needs and tailoring a custom plan for them.
Unfortunately, many wealth professionals don’t even bother to alter their client communication style when financial planning for women.
Because of this, 67% of women feel misunderstood by their advisor, and 53% don’t even have one.
Check out C2P’s latest podcast: A Woman’s Clarity!
First, educate yourself on digital marketing tips you need to target, convert, and close more women. Utilize proven digital marketing tips to find more female prospects. Then you create engaging content dedicated to educating and informing women about taking control of their financial future.
Before the first meeting, brush up on your client communication skills. Make sure you actively listen to their concerns. You want to create a safe space for them to ask questions; the last thing you want is to sound condescending.
Part of financial planning for women is teaching them how to take charge of the future, empowering them to make strategic decisions they can feel good about. It all starts online.
If you don’t have any ladies in your office, now might be the right time to consider adding a new hire to your team using our new Advisor Career Path model.
Alex Hopkin started her company, Simply Paraplanner, to help military wives and stay-at-home moms have more flexibility to work remotely in the finance sector. Alex has been a guest on the Rainmaker Multiplier On-Demand Podcast twice already this year!
You can also partner with female attorneys or accountants for client referrals.
Don’t be afraid to ask hard questions—having an open dialogue is crucial to effective client communications.
Having a deep understanding of your clients and prospects allows you to engage with your prospects, which leads to better lead generation numbers.
When conducting financial planning for women, you must address their specific financial insecurities, whether they’re single aunts, divorced mothers, married sisters, or widowed grandmothers.
According to the U.S. Bureau of Labor, women earn only 82.3% of what men make, and the gap increases for women of color.
Additionally, they must take time off work for pregnancy and child-rearing at a much higher rate than men. This results in countless lost wages, further decreasing women’s earning potential.
Did you know men major in economics at twice the rate of women?
This is where you need to consider adjusting your client communications strategy. We live in a patriarchal society that often fails its women in the way of financial education.
In fact, only 20% of women claim they felt their parents sufficiently prepared them for managing their finances as an adult, according to Fidelity.
Much of society functions because of women’s unpaid labor.
Women perform the majority of childcare, homeschooling, and household tasks, and often they are the ones responsible for and taking care of any aging parents as well.
Let’s say the husband handles the family finances. He will likely pass first. What happens then?
The Family Estate Organizer (FEO) is an immeasurable tool that allows a widow to seamlessly take ownership of all the necessary accounts, passwords, contacts, etc. Everything is organized into a binder and kept in a fireproof safe, ready for emergencies.
Addressing long-term care and life insurance options is very important when financial planning for women. Statistically, women live about five years longer than men, so they are often worried about the longevity of their funds. Your client doesn’t want to run out of money and burden her loved ones.
Although studies show women control most of the family’s day-to-day spending, they are often left out of the financial decisions that impact their long-term care.
Utilize proven lead generation strategies to target more female clients and prospects. In 2015, BlackRock reported only 30% of women ages 55-64 felt well-prepared for retirement—there is ample opportunity for you to increase your lead generation numbers among women.
When financial planning for women, one of your goals should be to help your clients prioritize themselves over their children or grandchildren.
Women are often concerned they will outlive their money, so they hoard wealth. And because of this, they never get the chance to appreciate their hard-earned money. You can’t take it with you, so the next generation is the one who enjoys all the spoils.
Another common scenario is when the client jeopardizes her retirement to financially rescue her adult children, who have failed to launch in one way or another.
Your job is to find a balance between the goals your client wants to achieve now, soon, and later. Some expect to have plenty left over after they’re gone. Others want to tiptoe the line between spending it all in their last good years and not running out of funds before they die.
Encourage your client to live her life, have experiences, and take trips while she can. Leave life insurance for the beneficiaries but inspire her to take the time to actually enjoy her retirement.
To learn more about financial planning for women and working with female clients, schedule a free consultation with one of our Business Development Representatives.
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
Learning how to talk to clients and find the communication tools that work for you is crucial to your financial advisor’s success and, ultimately, the relationships you build with your customers and their families. Financial advisor client communications are vital to developing trust and camaraderie with the people you serve.
In a 2019 survey, 85% of respondents said that communication tools and style would be considered when deciding whether to retain an investment advisor.
Greg Hammer is a Yale graduate with a degree in applied mathematics who has spent the last decade with C2P Enterprises, learning how to simplify the financial planning process and talk to clients more effectively.
In a recent episode of the Bucket Plan On-Demand Podcast, he and Dave Alison discussed proven metaphors and relatable examples you can start using right away to help your customers better understand the role of an investment advisor and the benefits of working with one.
Greg’s holistic financial practice services 800 clients per year. Greg attributes much of his growth to the financial advisor education he has received and the communication tools and methods he has refined throughout his career.
“I tell my clients to think of me as the mechanic. I need to lift the hood and show you what’s going on. That’s my job as a fiduciary. But after our relationship grows—if you never want to look under the hood again, I’m good with that. When you want me to shut up, tell me to shut the hood!”
-Greg Hammer
The first meeting can be overwhelming for a new client.
Greg recommends explaining upfront that you’re going to be throwing a large amount of information at them in a brief period.
Encourage them to ask questions but let them know that it’s okay if they don’t understand everything.
That’s why they hired you.
When you take your car to the shop, do you understand everything the mechanic says or does or put your trust in the expert to handle it?
Financial planning is no different.
You could spend all day explaining every detail of the portfolio, running through possible scenarios and market forecasts. But most clients don’t want that—they want to come in annually for a tune-up. Unless the check engine light comes on, they don’t want to worry about it.
A good investment advisor prevents breakdowns when they can. And when they can’t—they pop the hood back open and fix the problem at its source.
The mechanic analogy is easy to understand.
When you inevitably hit them with a bunch of jargon and acronyms, your client will feel less bombarded if they know upfront that they don’t need to comprehend every little thing you say.
They don’t have to understand how the engine works because they hired an expert. You’ll see immediate relief on their faces when you reiterate this.
However, the client is still responsible for the upkeep of their portfolio. There will always be gaps in the plan and changes to the market. You can’t take a set it and forget it approach to retirement.
A brand-new car still requires maintenance, after all. You have to change the oil, rotate the tires, and check for any damage or vulnerabilities.
There is a reason that financial advisor education is a continuous process—things tend to change quickly.
Life happens. When you get a flat tire, you assess, adjust, and continue your journey.
Ongoing holistic financial planning will account for adjustments and life changes. Retirement planning is like a road trip, sometimes your priorities change, and you need to alter your destination entirely.
“Just because you didn’t see the pothole doesn’t mean it’s not going to hurt.”
-Greg Hammer
An investment advisor should ask simple, decisive, open, and direct questions.
The more data you gather, the better your decision-making will be throughout the planning process.
For instance—instead of flying blind and reworking the Income Gap Assessment over and over, ask the customer an honest question.
How much money do you want to be guaranteed in your financial plan when you retire?
Now you know how much you need to put in annuities—it’s as simple as that.
On a recent episode of the Rainmaker Multiplier On-Demand Podcast, Bryan Bibbo and DC Chamberlin recommend scheduling quarterly financial advisor-client communications with your VIP customers to keep them updated on how their accounts perform and ask questions about what is going on in their life.
Additionally, don’t be afraid to ask them questions about themselves and their families. You want to connect with them on a human level, even if that’s through such commonalities as sports teams or musical tastes. These questions will come in handy when nurturing your leads.
How can you utilize various financial advisor client communications to develop your relationships further and provide constant value throughout all stages of the customer lifecycle?
Consider a card or flowers depending on the occasion. You can also use promotional products or corporate gifts around the holiday season to say thank you and stay top of mind going into the new year.
Bryan recalled a client whose wife was turning 60, and he mentioned they were planning a trip to Tahiti for her birthday. Before the trip, his team sent them a travel book on Tahiti.
Dave Alison suggests going so far as to ask where they’re staying and have a nice bottle of wine sent to their room.
Want to learn more simple, practical financial advisor-client communications?
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
The Advisor Career Path is a method of structuring your financial practice, so it can continue to prosper without you. There will come a time when you need to step away from your firm. Whether it’s for an extended vacation, medical or family needs, or you’re just ready to retire—constructing a financial planner career path ladder will pave the way for you to delegate responsibilities through a seamless transition and put your mind at ease.
We spent over three years refining and developing a scalable career trajectory that reflects the financial industry’s best practices and the experience and research we’ve accumulated over decades of observing advisors within our own firms. A financial planner career path is essentially a rubric with growth objectives for your employees.
You can use your financial planner career path for everything from recruiting new team members, to coaching current members. This career path for financial advisors encourages employee retention because individuals can visualize their career years into the future with your company before they start. This builds a sense of loyalty and commitment to the goals of your firm.
We illustrate the Advisor Career Path with a 5-rung ladder. Each rung is broken down into three measurable steps, with a detailed scorecard, so there is no room for misunderstanding.
One of the best things about a financial advisor career path is that both employees and their supervisors will always know what they need to accomplish to move to the next rung and ascend the ladder.
On a recent episode of the Rainmaker Multiplier On-Demand Podcast, Rob LaCivita, Chief Operating Officer of JL Smith, broke down each rung of the ladder in detail. Rob holds quarterly conversations and regular reviews, so he has the benefit of communicating with advisors often about the trajectory of their careers, future goals, and more to get a better understanding of how the Advisor Career Path works for different people.
Client Service Advisors and Paraplanners exist Backstage, meaning most of their work is done without interacting face-to-face with clients.
Advisors, Lead Advisors, and Practicing Partners are client-facing Frontstage roles.
Some people are hunters, meaning they have a natural inclination to hustle. They want to go out looking for new business and develop better customers. These people will want to move up the rungs at a record pace.
Other people are farmers who do their best work growing the business from behind the scenes.
Both hunters and farmers can be of immeasurable value to your business.
It should be noted—not every single employee will want to move all the way up the ladder. And everyone moves at their own pace.
Some people are more comfortable mentoring and developing fellow employees than meeting with new clients all the time.
These people may spend more time in each step of each rung, but they help their peers succeed, and they do incredible work behind the scenes for both clients and the organization. They plow through the accounts to cultivate more business out of existing clients. As we all know, nurturing your client relationships is far easier and cheaper to accomplish than bringing on new business.
You may have an employee who never wants to go Frontstage. That’s okay.
If they’re happy in a supporting role that doesn’t involve a lot of face time with clients and they’re flourishing in that position, maybe that’s the best fit for them. You can still carve out a long-term career model for people who prefer to remain Backstage, and they can remain an invaluable part of the organization.
Ask your employees what their ideal career looks like, don’t just assume everyone wants to make it to Practicing Partner.
Does this person want to go out and find new customers and more business, or would they rather spend their time training new talent and building the team? Allow your employees the autonomy to find their niche and thrive in the role that fits them best.
In the Frontstage, you have Advisors, Lead Advisors, and Practicing Partners. Smaller companies may utilize experienced Paraplanners in the Frontstage as well.
In the Frontstage, there is a two-chair approach to servicing clients. First Chair Advisors consist of Lead Advisors and Practicing Partners. At the same time, Advisors or Paraplanners act as Second Chair Advisors.
First Chair Advisors are senior team members whose primary responsibilities include serving as rainmakers to feed the firm’s ROI. They close business, hunt for new prospects, run meetings, work with VIP clients, and counsel Second Chair Advisors.
First Chair Advisors are natural hunters who want to go out there, find new business, and meet new customers.
Second Chair Advisors play a supporting role to the First Chair Advisors. They are responsible for meeting organization and follow-up needs, plan design, and financial advisor client communications.
The Client Service Advisor role is an entry-level Backstage position with the opportunity to become a future advisor of the organization. They handle client administration duties and new business.
The Paraplanner position offers a transitional job for a more experienced Backstage team member to learn and build financial plans in preparation for advancing to the next rung. They handle financial and tax modeling as well as product recommendations.
Jason L Smith spoke with Alex Hopkin from Simply Paraplanner on the Rainmaker Multiplier On-Demand Podcast, about how some people are happy in a Backstage role and want to remain a Paraplanner for the entirety of their career. They started out focusing on Paraplanners, but now you can hire for any rung of the ladder if it’s a remote position. If you’re interested in hiring virtual team members, check out Simply Paraplanner’s online job board.
The Advisor role is Frontstage and client-facing. The Advisor serves as a Second Chair support system to Lead Advisors and Practicing Partners with onboarding and servicing clients.
The Lead Advisor leverages knowledge and experience to close and develop business. As a First Chair, the Lead Advisor will mentor and guide less experienced advisors.
Allowing your advisors to strive to the Practicing Partner level gives you the ability to attract, retain, and reward top talent. Practicing Partners have ownership and stake in the firm. They serve in a leadership role, helping to shape the company’s overall strategy. They are hunters and rainmakers who feed new business into the funnel.
There are many ways to grow your business. It’s all about getting the right people in a position where they can thrive.
In addition to the step-by-step career ladder, the Advisor Career Path contains compensation structure information, Responsibility Agreements, and other tools you can start using in your business right away.
The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time of the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.