Displaying items by tag: client 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.

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.

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. 

Expertly managing investments is crucial, but what truly sets exceptional financial advisors apart is fostering peace of mind. While algorithms excel at navigating markets, understanding the human dimension – your clients' hopes, fears, and aspirations – requires a different kind of expertise.

Peace of mind doesn't solely stem from stellar returns; it comes from knowing you have a confidante who understands your unique circumstances and offers sound, impartial advice.

How do you find the time to cultivate this connection when portfolio management is a full-time job? One option is to consider model portfolios: professionally managed options offering efficient diversification, transparency, and robust reporting. By outsourcing this task, you free up valuable time to focus on what truly matters – your clients.

Instead of being bogged down by portfolio construction, dedicate yourself to empathy, understanding, and building personalized solutions. Ask probing questions, acknowledge their emotions, and tailor your recommendations to their unique needs and values.

Remember, clients seek a partner who navigates the emotional terrain of financial planning with compassion, expert guidance, and a genuine interest in their well-being. By strategically prioritizing connection and leveraging technology, you can become an indispensable source of peace of mind, the most valuable asset any advisor can offer.

Finsum: Learn how model portfolios can enable advisors to reach the ultimate goal of helping their clients achieve peace of mind.

Artificial Intelligence (AI) is disrupting how businesses operate in multiple ways. Advisors should embrace this technology, because it can help create more efficiency by handling routine tasks, freeing up more time and energy for high-value tasks. It can be particularly valuable in terms of managing the practice.

Some considerations include figuring out which parts of the business can be enhanced with AI and which should remain in the purview of an advisor. Another is that proper training in these tools is necessary in order to ensure that they are being properly used. 

An example of how the technology is already being leveraged to improve practice management is through the use of AI note-taking applications. Prior to this, advisors (or a staff member) would take notes during the meeting which can be distracting and detract from cultivating engagement. These apps can essentially transcribe and summarize the conversation which means advisors can stay in the moment and give full attention to the client.

Then, these summaries and notes from client interactions can be integrated into the customer relationship management (CRM) software. Thus, these notes can be used by the practice to provide a richer experience for clients by methodically following up on all relevant matters. AI can also help discover insights and identify action steps that need to be taken. 

Finsum: AI is the latest disruptive technology that will certainly impact multiple aspects of an advisors’ practice. Here is how it can be used to improve a practice’s operations.