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Retirement planning and wealth management have long focused on portfolio performance, returns, and math. We have all talked to clients who want a certain dollar amount in their portfolio by the time they retire, and market volatility is making those conversations tough. But financial planning isn’t all about numbers.
How can advisors turn their clients’ focus from dollars to dreams? How can making a clear connection between their real and financial lives create a meaningful client experience and add value to an advisor’s service?
Know your client
When you pivot the conversation to what a client wants their life to be like instead of explaining portfolio performance, you learn more about what matters. You hear about their goals, what they want to provide for their children or grandchildren, and how they envision their legacy. You will align with your client’s values and help them make financial decisions that will help them live their best life.
Build a better relationship
Spending more time talking to your clients about their goals also deepens your relationship. Instead of transactional conversations about portfolio performance, you talk about their lives and priorities, developing trust and connection. As your clients’ trust in you increases, you find more opportunities to manage their financial lives. Additionally, you get to know their family and foster a multi-generational relationship.
Offer personalized financial advice
Focusing on your clients’ long-term goals allows you to offer more personalized advice. For example, the approach for someone who wants to buy a yacht and spend their golden years sailing around the world is going to be different from someone who wants to live close to their children and grandchildren and volunteer at their local library. Ideally, you should be helping clients not only to prepare for the future, but also lead their best lives now. Striking the right balance between saving, investing, and enjoying life today, varies from client to client.
Create mental and emotional space to manage market volatility
If there’s one thing that history can show us, it’s that the market peaks and troughs, driving the value of clients’ portfolios. If your clients are focused on accumulating a specific dollar amount, these cycles can be terrifying, especially as clients get closer to retirement. However, when your clients understand that they don’t need a specific number to live the life they want, it makes it less stressful to ride the ebbs and flows of the market.
Technology is already part of your day-to-day, but it becomes even more critical here. The right platform will determine if your clients are on the right track to meet their financial goals. It will also allow you to adjust the various factors influencing your clients’ portfolios to identify any changes needed to keep them on the right path. Finally, the right software will provide easy-to-understand illustrations that you can use to help your clients -grasp their financial situation and how it can influence their life goals. Some math is still necessary, but it provides the foundation for more meaningful conversations instead of dominating your time with clients.
Use these tools to educate your clients and show them that they don’t need a specific number, but for their portfolios to fit within a certain range – or comfort zone – and allow them to live the life they want. After all, the market will continue to fluctuate after your client retires. They’ll need a buffer to maintain the income and lifestyle they want.
Additionally, making changes to maintain a comfort zone will often be less disruptive and allow your clients choice in what they want to change. The solutions won’t be binary. For example, if a downturn pushes a client’s portfolio toward the lower limit of their ideal range, you can help them decide on the right combination of changes, which might include spending less, reallocating their assets, diversifying their portfolio, or all three.
This is where technology can be impactful. The right software will illustrate how changes today impact a client’s life tomorrow and in the long-term future. When you can adjust the various factors that contribute to a client’s chance of reaching their goals, you demonstrate how their actions today will affect the future. This helps them decide what adjustments they’re comfortable with now instead of being prescriptive in your advice.
Your clients should be your priority. Finding ways to have more meaningful conversations leading to deeper relationships is essential to the success of your business. Finding the right software to support those conversations can make a significant difference to your clients and bottom line.
Matt Regan is the president of Wealthcare, a hybrid RIA with $4.8bn AUM that began as a technology company over 20 years ago.
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