Displaying items by tag: client management

Human capital is the ability to use your skills and experience to generate income. Younger people have ample time to improve their human capital and earn paychecks to fund their lifestyle. However, as we age, the time and opportunities we have to develop and utilize our human capital decline.

 

People know that if they suffer an investment loss early in their career, they can make up for that loss by working longer or searching for a higher-paying job. Yet, this ability decreases as we near retirement. Whether we realize it or not, declining human capital makes us less risk-tolerant with our financial capital.

 

For retirees, most, if not all, of their income must come from their portfolio rather than paychecks, which often causes them to be overly protective of their financial capital and invest it more conservatively than they need to.

 

One solution to helping them take more investment risk while still feeling that their financial capital is protected is a fixed indexed annuity. These products typically provide downside protection, a steady income, and participation in a portion of the market gains of the underlying equity index.


Finsum: As human capital decreases, investors become more protective of their financial assets, but that doesn’t mean they can’t participate in equity growth. Find out how in this article.

Published in Wealth Management

While portfolio construction is crucial for achieving client investment goals, it's merely one facet of a successful financial advisor-client relationship. A deeper understanding of the client's life circumstances and how their investment objectives fit into their overall financial picture is equally important for fostering trust and long-term engagement.

 

Time constraints often lead advisors to outsource portfolio construction, allowing them to dedicate more time to relationship building. Delegating this task can prove to be a win-win for both parties. The client gets professional investment management from an entity whose sole job it is to maintain their portfolio. And the advisor has more time to be there for their clients when they truly need them.

 

However, even with outsourcing, advisors must understand the client's portfolio construction and ongoing management comprehensively. Overreliance on outsourced services can lead to losing track of the intricate details of the investment process.

 

Ultimately, the client relies on the advisor to bridge the knowledge gap between their financial goals and the details of portfolio implementation. By remaining knowledgeable and engaged, advisors can effectively represent their client's best interests and build a robust and enduring partnership.


Finsum: Advisors outsourcing portfolio construction benefit from more time to build client relationships, but they still need to keep up with the details of the investment management of client accounts. 

 

 

Published in Wealth Management

It’s a simple truth: the more you do something, the better you’ll become at that task. For financial advisors, communicating with clients consistently and confidently is one of those skills that is essential to a healthy practice.

 

Let’s apply this concept to explaining to a client their investment portfolio: how it was constructed, how it’s maintained, and why it has the components it does. Imagine two scenarios: one where you’ve built customized portfolios for each of your clients and another where you’ve implemented a set of model portfolios across your book of business. In which scenario would you feel more confident explaining each approach to each client?

 

The point is this: model portfolios offer more than just operational efficiency. They provide advisors with the benefit of consistent communication. By implementing a defined set of investment strategies across your client base, you can polish your investment story into a clear and consistent narrative.

 

This consistency translates to proficiency and, ultimately, confidence. You become adept at articulating its nuances and rationale by repeatedly explaining a unified investment approach. And the more practiced you become at telling your story, the more confidence you convey to your clients.


Finsum: Find out how model portfolios can help you tell your clients a consistent and compelling investment story, building trust and confidence.

 

Published in Bonds: Total Market

With the introduction of Bitcoin ETFs in January 2024, financial advisors are getting more questions from clients about whether it makes sense to consider these types of investments for their portfolios.

 

One topic that will undoubtedly get more attention in the press this year (2024) is the Bitcoin halving event, likely to occur in spring or early summer. Regardless of their view on this asset type, advisors should prepare themselves for client questions regarding this event.

 

Essentially, the Bitcoin protocol has pre-programmed events that periodically reduce by half the amount paid to the entities that verify Bitcoin transactions. Payments to these entities, called miners, are the only way new Bitcoins enter circulation. This means the rate at which new Bitcoins enter circulation is reduced. The point when the reward to miners is reduced by half is called a halving event.

 

The impact of a halving event on Bitcoin’s price is complex and debatable. Some believe that the reduced rate of new supply will cause the price of Bitcoin to rise. Others might make the case that factors beyond supply will have a more significant impact on the price in the future. Regardless, the performance of Bitcoin around the time of previous halving events is no guarantee of future price movements.


Finsum: Bitcoin is closing in on a halving event, and advisors should know the basics to answer client questions.

Published in Bonds: Total Market
Thursday, 15 February 2024 14:31

Marketing to High Net-Worth Clients

Any advisor who is serious about acquiring high net-worth clients’ needs a solid marketing strategy. This is because there is intense competition to land these clients, and it’s necessary to differentiate your services in the marketplace.

 

The first step is to clarify what exactly you are trying to accomplish with your marketing plan. This can include increasing awareness of your practice, building trust with prospects, branding, creating credibility, and highlighting your expertise and knowledge. 

 

Next, it’s essential to understand the needs, goals, and challenges of your target audience. Some themes that are likely to resonate with wealthy clients are areas like legacy planning, minimizing tax liabilities, or superior levels of service. 

 

Building authority and credibility is an important prerequisite when it comes to landing wealthy clients. Some ways to do this are through interviews with journalists, being a guest on a podcast or program, collaborating with other professionals, and building a following on social media by regularly sharing valuable information. 

 

During the process of converting a prospect into a client, advisors should ensure that all interactions with prospects and full of value with the intention to create trust. This starts from the first interaction with a client and should always remain a primary ingredient in every point of engagement.


Finsum: It’s quite competitive and difficult for advisors to land wealthy clients. Here are some tips on how to be successful. 

 

Published in Wealth Management
Page 1 of 6

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…