Be the Hub of your Client’s Financial Affairs

I was recently helping a very progressive financial advice firm in Cork with their marketing planning. As part of the conversation, we discussed value added services that advisers can offer today and indeed I got talking about my relationship with my own financial adviser.

I see my financial adviser as the hub of my financial affairs. My accountant does a very solid job in terms of the production of accounts and ensuring I pay my taxes on time and basically don’t break the law! But I really see him in a transactional / compliance capacity.

On the other hand, my financial adviser provides a broader range of value to me. Yes, he has of course developed my financial plan and ensured I have the right investments, retirement planning and protections in place – I’d expect no less! But he also guides me in relation to much broader financial-related issues and I’ve found this a bit unexpected and extremely valuable. He’s now the go-to guy for me in relation to my broader financial affairs – he’s the hub of my financial world.

Having been the beneficiary of such value-added services, I’ve identified below a few areas in which you can add value to your clients beyond the preparation of traditional financial plans and beyond the products that you recommend to your clients. Why bother with these? To build your client’s appreciation of the value that you can bring and to make you the first port of call when changes in their circumstances arise.

Budgeting

I’m starting with an easy one that is often overlooked by financial advisers as not needed by clients because “everyone does it”. I disagree! People tend to do personal budgeting in a very unstructured fashion, usually in their heads. The opportunity is here for financial advisers to bring templates to their clients and help them structure their budgeting and examine all of their day-to-day spending.

Apart from the value that the exercise brings, for married clients it is a great way of engaging the spouse too in the overall process, as their spending is equally important in the overall picture.

Future Cashflow Planning

I refer to this a lot, but only because I see it as such as a valuable service offered by some financial advisers. It certainly isn’t appropriate for every client, but is hugely valuable to those who are suitable. The reason for this is simple. Traditional financial planning focuses on the starting point (as identified within the factfind – where you stand financially today) and the end event (death, investment maturity date, retirement date).

Future cashflow planning focuses on every year between now and your death, highlighting times of particular financial challenge to you in the future. Knowing the challenges that you will face, gives you an opportunity to plan to overcome them.

Tax Advice for Individuals

Business owners and professionals will usually have an accountant. Most PAYE workers probably don’t. That doesn’t mean that they can’t benefit from tax advice; some want help in completing their tax returns, some want general tax advice. There’s a growing trend internationally of financial advisers moving into this space, in fact some financial advice firms are now employing accountants or tax advisers to provide this service and other tax advice to clients.

Now this approach is not going to be for everyone. At a minimum though, you should have a relationship with a good tax expert that you can plug your client into. The benefit for you is that it’s another demonstration of your value, as you are the catalyst for your client receiving the broader solutions needed.

Financial advisers also play a very valuable role in helping clients prepare for later in life and indeed end of life through retirement planning and life assurance solutions. However there are a number of other ways that you can help your clients prepare for these latter years, again helping to position you as the hub of their financial affairs. Some of these areas can also potentially bring you into contact with your client’s adult children, an important target market for many advisers.

Advice about Bank Accounts

Neither my bank manager nor my accountant spoke to me about having multiple signatories on my bank accounts, both personal and business accounts. But my financial adviser did. This is very practical advice, ensuring that in the event of my death or loss of capacity, that my wife would be able to access my money without jumping through all types of legal hoops…

Enduring Power of Attorney

This is a legal document that can be set up by a person during their life when in good mental health. It allows another specially appointed person to take actions on their behalf should they become incapacitated through illness in the future. This prevents assets being frozen and going under the control of the courts and allows the person acting on your behalf to make a range of personal care decisions on your behalf.

Anyone who has been through this situation, needing to access the assets of a relative who has lost their mental capacity (e.g. to pay for their care) will know the value of having an enduring power of attorney in place. It can be incredibly frustrating being unable to carry out simple actions on the person’s behalf without it.

At the same time, many people also draw up a “Living Will” which captures their preferences in relation to areas such as end of life care, their preferences in terms of resuscitation etc. when close to death.

A financial adviser won’t set this up. However they can be the catalyst for it happening through setting out the benefits of it to their clients and guiding them to put it in place. The adviser may even be able to refer them to a solicitor who will carry out this work with the client.

A Will

Again this is an area where financial advisers can guide their clients to ensure that they have a will in place to ensure their assets are distributed as they intend on their death. A simple process usually carried out with a solicitor.

These are some areas that financial advisers can help or guide their clients through. They add real value to your relationships; way beyond the product solutions you advise clients about and put you firmly at the hub of your client’s financial affairs.

Are there any other areas beyond products in which you advise your clients?




image courtesy of Flickr / David Hunter