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How to Explain the Benefits of Having a Financial Advisor

How to Explain the Benefits of Having a Financial Advisor

The most successful people in the world have coaches. Top athletes, CEOs of major corporations, and entrepreneurs all have trusted advisors that help improve performance. So, how can you convey this to prospective clients that need help reaching their financial goals? After all, when it comes to saving and investing for the future, they shouldn’t do it alone.

When people want to improve their financial situation, grow their assets, eliminate their debts, and reduce their expenses, it’s good to have a financial advisor on their team. Let’s discuss why, in a world where it’s easier than ever to purchase investments online and automate their finances, they’ll still want to hire you as their financial advisor.

Financial Advisors Help Set Short, Mid, and Long-Term Goals

Source: Young and Scrappy

As people enter a new year, there’s a lot of motivation to set resolutions that will improve their lives. Although the passion for accomplishing goals is strong at the beginning of the year, it’s easy to break resolutions as time goes on, either consciously or unconsciously. A big reason for losing motivation is because we usually don’t take broad goals and break them down into tangible monthly, quarterly, and annual goals. However, when people work with you as their advisor, they’ll have an opportunity to review their financial situation at least once a year, while also setting goals for different periods of their lives.

Let your potential clients know that you can look at their financial snapshot and help set achievable goals. There are short-term goals such, as paying down high percentage rate debts and growing emergency funds. Next are mid-term goals, like finding the right insurance plan, paying off student loans, and saving for a vacation or home purchase. Finally, there are long-term goals, such as planning for retirement. You can help set appropriate goals with your clients that do not significantly affect their current lifestyles, while also eliminating their current and future money woes.

Maximize Their Investing Performance While Reducing Taxes

When it comes to investment performance through compound interest, every percentage increase counts. But how does working with your lead to improved investment results for your clients? According to a Vanguard study, your clients will earn up to three percentage points more on their investments with you then they can achieve themselves. Plus, you can prevent clients from going against their long-term investment strategies during a downturn to achieve better returns when the stock market corrects. This is invaluable advice, as many clients likely tried to get out of the market in March this year, which would have been a massive mistake. Overall, working with you should result in much higher returns than they can achieve alone.

Source: Guaranty

In addition to helping improve investment performance, you will also help clients minimize the amount they pay in taxes each year. There are several ways that you can do this using tax-free and tax-deferred accounts, by utilizing the right asset locations, through recognizing tax gains at the right time, and through estate tax planning, to name a few. As an average person without a finance background, determining the right investment types for certain tax situations can be challenging. Luckily, you have knowledge that will set your clients up for long-term success by saving more of their hard-earned money and spending less on capital gains and income taxes.

Someone to Discuss Finances With

Talking about finances with other people can be difficult. But what if your clients need to discuss their partner’s or children’s financial situation? While they might have a close relationship with family members and friends, the topic of money, debt, and investing are often off-limits. This is another way that you can benefit them. There will be no financial situation off-limits, and no judgment about their current financial condition. Plus, your clients can get help explaining saving, college tuition, and debt with their significant other and children. We all know that money is essential to every household. By getting help from you, your clients gain the knowledge necessary to have meaningful conversations about money that would otherwise be uncomfortable.

In addition to having someone to discuss money with, you can also educate clients about finances. They’ll likely have questions such as, “why is the stock market going up when unemployment numbers are poor?” or, “what’s the best way to pay off my debts?” Whenever they have broad questions, you will be there to help. With online content, email content, and one-on-one assistance, their most pressing financial issues will never go unanswered.

They’ll Find it Easier to Stay on Track

Managing an investment portfolio with you a guide makes it easier to buy and sell at the correct times. Or at least when not to buy and sell at the worst times. When the stock market takes a dip, it can be easy for your clients to make emotional decisions. Instead of making a mistake, they’ll have the option to contact you for advice. You can look at your client’s investment performance objectively and stop them from acting contrary to their long-term objectives. Without you as an advisor, there’s a significant risk of making a rash decision, which often results in reduced investment performance.

Furthermore, you are there to keep your clients accountable. Were they able to stick to their budgets this month? What can they do moving forward to ensure they reach their goals for this upcoming month? When you’re always tracking and reviewing their financial situation, your clients are more likely to succeed. On the other hand, without having an advisor to discuss their goals and keep them accountable, there’s an opportunity that prospective clients will not make the right financial decisions. They can avoid this problem by hiring you to keep them both on track and accountable.

To conclude, there are many reasons why it’s essential to have you as a financial advisor. If prospective clients want their investments to achieve better results, they need assistance creating short-, mid-, and long-term financial goals, or they want someone that can answer financial questions, then you can help. Be sure that they’re setting up their family for financial independence and success by selecting the right coach. Through helpfulness, sound advice, and proof of the results you’ve achieved with other clients, you will add even more people to your clientele without any hassle.

Akhil Lodha Author
Co-founder & CEO StratiFi Technologies

Building the industry standard for understanding portfolio risk through cutting- edge technology at Stratifi.

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