2018 has been a challenging year for investors, which is largely due to volatile global markets. Despite the headwinds for investors and financial advisors, the year has actually given all in this business amazing gifts – knowledge and perspective. At some point, we’ve all read the disclosure “past performance is not a guarantee for future results,” but with the S&P 500 Index delivering positive performance in each calendar year from 2009 through 2017, many investors expect account balances to go up every year.
If you provide comprehensive financial advice, investors are working with you for your advice, which can include everything from tax planning, estate planning, education planning and investment planning. Although you’re always dedicated to providing comprehensive financial planning, typically investors only laud advisors as long as their account values are going up. As your year-end investor meetings are on the horizon, consider revising the messaging of your services, and how those services apply to all market environments, not just when markets are doing well.
It’s ALL about messaging
As an example, a client walks in today and wants to discuss portfolio performance thus far, and changes (if any) for next year; what’s on your agenda? Volatile markets will probably be a point of conversation, but that’s out of your control. What you can control is keeping the economic headlines talk as an educational point during a bigger conversation that will cover actions (not reactions to markets.) What if you lead the discussion with action items that were proactively done on the clients’ behalf? Reviewing potential tax savings within a Separately Managed Account might be a worthwhile conversation too. How about charitable gifting ideas for those clients who are charitably inclined? What I’m getting at here is that there are many options for an effectively-crafted message to your clients in an environment where there is a lot of negative. The gift of 2018 is that while markets haven’t matched previous years’ performance, your message is focused on action items that are in your control, and less on those out of your control.The gift of volatility Click To Tweet
A tax planning example
In a survey done by Wealth Briefing, almost all of the millennial investors questioned said that face-to-face financial advice was as important as their wealth accumulated, and an overwhelming majority said they trust a personal advisor for tax planning (see chart below*). Even if the investor isn’t aware of the benefits of tax planning, your messaging can pivot to the benefits of incorporating tax planning in a year where market performance may not have met expectations. Based on the data, investors want it; and considering your advice becomes more complex as a client’s wealth accumulates, that client should view you as more than a wealth accumulator, but more as a source of impactful insight and ideas.
As the season of giving is upon us, it’s important to be mindful of the opportunities that are in front of us. As a financial advisor, you’ve embraced the task of assisting clients in meeting their short-term and long-term goals – regardless of how the financial markets perform. Create the correct message about what your offering truly is and your long-term value in your clients’ lives, and you’re giving them a gift of a lifetime –comprehensive financial planning.
* WealthBriefing: Unpacking What Millennials, Generation Z Wants – The Wealth Perspective. December 4, 2018