I love financial advisors and have been helping them grow their businesses for more than 20 years. This blog contains all sorts of proof to the value of a financial advisor – feel free to use it to add just a few more nuggets to your significant value.
Money, money, money. No matter who you are, it just seems to make everyone unhappy.
According to Thriving Wallet, 90% of Americans are stressed about money. Yikes.
And it’s not any better if you have someone to lean on, as 1 in 5 couples say that money is their greatest relationship challenge and 44% admit to arguing with their spouse about money at least occasionally, according to a study by Fidelity Investments.
If money alone spikes everyone’s blood pressure, just imagine what the more complicated concepts of investing and financial planning can do.
But financial advisors can not only take that stress away but also improve their clients’ outlook and outcomes. You have the power to make your clients’ lives better, because those who work with a financial advisor are reportedly about 3x happier than those who don’t.
THAT’S RIGHT! —- 3 times happier!
And that ability to transform stress into happiness can help differentiate yourself from other advisors and show the value of your services. To help you harness client outcomes in demonstrating your value, here are three areas you as an advisor can highlight:
1. Big Goals
Typically, what every client really is thinking about when they think of investing is retirement. But the Transamerica Center for Retirement Studies found that only 16% of workers were “very confident” they will be able to fully retire with a comfortable lifestyle. And according to Ramsey Solutions research, 44% of investors who partner with a financial advisor have saved $100,000 or more for retirement versus just 9% who don’t have one.
As an advisor, you know how easy it can be for clients to lose sight of goals or not even have any when they’ve been doing things by themselves. You can share a case study of a client who came in with no goals and then demonstrate how you worked with them to understand their entire financial mindset, talked through their goals, and then helped break it all down into easily digestible chunks to show how possibly overwhelming things like buying a house or saving for college were attained.
2. Long-Term Returns
A study by Russell Investments estimates that a good financial advisor can increase a client’s returns by 3.75%. That’s definitely nothing to snuff at, but also don’t be afraid to point out that you as an advisor can help them keep a level head when the markets get volatile.
Case in point: When investors choose to do their own strategy and time the market, as a study from Morningstar shows, they get much lower returns than the actual funds they are investing in. This happens when they will unwittingly sell low and then buy high, because they buy in after the fund has done well and get out of other funds right before they start to take off.
To demonstrate your value, you can point out that you are a third-party, impartial expert whose actual legal duty it is to help them get the best returns and whose full-time job it is to work on their investments. The markets can swing wildly and quickly, but you are apt at making quick decisions when they are needed to protect their investments.
Plus, you can also be there to remind them that investing is a marathon and not a sprint. You have helped them build portfolios customized to their risk tolerance and time horizon and optimized to bring in the highest returns long term.
3. Entire Financial Picture
It’s no wonder that so many Americans are stressed about money when you also take into account that 75% of Americans are managing their money without any help. Only 17% say they are using a financial advisor.
The aforementioned Fidelity Investments study also showed that couples who work with an advisor are less concerned about common financial stressors, including:
- Building up emergency savings
- Having enough money saved for retirement
- Paying off debt in general (credit cards, personal loans)
- Saving enough for their child’s education
- Saving enough to purchase/pay for a home
As an advisor you can also talk through how other health financial habits can support their investments, such as establishing a budget, creating an emergency fund, figuring out tax savings, having an estate plan, and finding the right combination of insurances (life, disability, etc.).
By painting a holistic financial picture, you can truly help your clients and prospective clients see money as a source of happiness instead of sadness.
Maribeth Kuzmeski, PhD, President of Red Zone Marketing, is a marketing strategist, advisor to financial services companies, bestselling author of seven books, and a professional speaker rated as a Top 25 C-Suite Speaker as seen in Meetings & Conventions Magazine. She speaks on topics including marketing, branding, sales, and customer service.
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