In January, many of your clients made New Year resolutions. Depending on their life stage and wealth, their financial resolutions range from building a greater retirement fund and saving more, to diversifying their investments with new and/or alternative investments, purchasing or divesting of certain real estate, and increasing their charitable giving. As their financial advisor, however, what resolutions have you set? It is just as important for you to set new professional goals for 2019 and resolve to implement new best practices.
Better Client Communication
As in any trusted advisor relationships, client communication is vital. Make sure the lines of communication between you and your client flow freely. Be proactive in contacting your clients on a regular basis and ask, “How are you doing? Do you have any concerns or questions regarding your financial plan that I can address?” Reviewing your clients’ plans on a regular basis and updating them based on life changes, new financial goals, etc. should be a routine best practice of every financial advisor. Keeping your clients informed about new investment opportunities, including alternative investments, or potential effects of changing market conditions, is also essential. By taking the initiative and providing valuable information before your clients ask conveys a true commitment and focus on delivering real value to the relationship.
Compliance and Transparency
The past two years have introduced heightened regulations worldwide affecting financial advisors; their fiduciary responsibility, system security and transparency. Along with complying with the regulations governing advisors where you do business, consider other ways you can demonstrate full compliance and transparency in your practice, portfolio performance, fees and overall quality of service to your clients. Going beyond what is required of you conveys a high level of professional integrity; a trait all clients seek in their advisors.
Don’t be content with your current credentials and degrees. Make a resolution to become a continuous learner. Attend seminars on subjects that will make you a well-rounded financial advisor. For example, consider impact investing, alternative investments, estate planning, accounting, elder care, special needs financial planning and charitable giving as seminar topics to pursue. If you are not already subscribing to leading financial news and trade publications, do so. Stay abreast of the news and developments in the field to assure that you are on the leading-edge of today’s financial advisory and wealth management practices. Joining professional associations and exchanging ideas with your peers is another way to gain new information and insights that will make you a better financial advisor. Attend professional development conferences such as the: “Transitioning from Advisory Practice to Business: Carson Excell 2019,” “Technology Tools for Today (T3) Conference,” “Morningstar Investment Conference,” “Australia Finology Summit 2019” and “Portfolio Construction Forum.”
Upgrade Your Information Technology Systems
Evaluate your current technologies. Along with making sure you are meeting all related regulatory requirements, consider whether your technologies are as client-friendly as they can be. Are you embracing new digital technologies to communicate with your clients, particularly the younger generations, in the manner they prefer? If you are not among the digital natives, seek the advice of a peer whose practice is already applying new technologies to communicate and share information with their clients. Resolve to research and evaluate leading software programs used by financial advisors (e.g., MoneyGuide Pro, eMoney Advisor, Right Capital, Advicent, etc.).
Manage Your Clients’ Risks
Above all and regardless of your clients’ assets, financial goals and tolerance for risk, manage their risk. Review their portfolios and their overall financial picture to ascertain their exposures and strive to mitigate any unnecessary risks. While clients may indicate a high tolerance for risk, it is a safe bet that many do not have a full understanding of their risks and exactly what might be at stake. As their advisor, it is your role to make them aware of their exposures and then, apply discipline in their portfolios’ architecture and in the investment recommendations you make to contain unnecessary risk.
Self-Appraisal, Firm Appraisal
A chief component of professional integrity is looking in the mirror and making sure you are doing the best you can for your clients. Sometimes, this means walking away from a client and making a referral to another advisor who is better suited to meet a particular client’s needs. It also means assessing your team; their knowledge, skills, client relationships and performance. You may need to make some staffing changes; discharging certain associates and/or recruiting new professionals. The beginning of the year is a good time to conduct a thorough audit of all your resources, including your human resources.
By resolving to implementing better practices in 2019, apply new technologies and expand your knowledge, you and your firm will realize a more productive and successful new year marked by stronger client relationships and a greater ability to weather challenging market conditions.