The Value of an Advisor: 4-Point Checklist

Making the complex simple. It’s what we strive for on a regular basis. Think about your daily life. Do you pay a premium for simplifying things? Think Amazon, Netflix and LinkedIn, to name a few. How much would you pay to free up more time to take a vacation, focus on family or better yet, knock off those lingering home improvement projects that never seem to end?

Investors are no different. They’re routinely looking for advisors to simplify the complexities inherent in their lives—and they’re actively seeking your help. Many are starving for time and trust. Trust in your advice, guidance and wisdom to help them make their complex lives simple and give them back the time they so desperately need.

Most investors have never had formal training, let alone taken basic classes in school to learn about money management. Talk about a golden opportunity for you to insert yourself and help! I see great value in teaching investors how to make the complexities of financial planning, goal-based advice and multi-asset investing strategies (as well as the convexities of the bond market—had to throw that one in for fun) simple enough that they’ll actually want to be a part of helping you help them. In turn, this can create trust, simplicity, candor and confidence in the value advisors deliver.

Now that we’ve addressed the why behind this post, let’s move on to the what—as in, what do advisors need to do to deliver value beyond the fee or commission they charge?

The answer? It starts with a P.

Four Ps to delivering value beyond your fees

Planning:  This is one of the top drivers in delivering value to an end investor. All engagements with end investors need and must start with a financial plan. Period. You need and must know where ALL of the money is located, including views into insurance, wills, trusts, mortgages, etc. Not knowing runs the risk of taking the plan you have agreed upon with your client and turning it into something completely different. That’s why you must know where all of the money is located. In my view, this is non-negotiable.

It’s also important during this process to gain a firm handle on an investor’s emotional, egotistical and behavioral view of money. After all, how can you deliver advice and guidance if you don’t know what their goals, dreams and aspirations are—what ‘s important to them and what’s not? Every investor is different. Don’t treat them the same.

Prioritization: Once a plan is established, prioritization of an investor’s financial goals is the next step (one that’s often overlooked). Working together within the context of the financial plan, agreeing to the priorities of one’s financial goals is crucial as it provides a due north to focus on.

Often skipped at this stage—but not by top advisors—is the risk side of the planning process. At its core, this should be a discussion about (and prioritization of) risk protection, including life, disability, long-term care, P&C and other insurance products. In short, always be sure to ask, and you may deliver even better advice/value.

Portfolio: Once the plan has been built with the appropriate prioritization, aligning the portfolio to the goals, risk tolerance, behavioral, and emotional attachment to money is important. We believe top advisors should use model portfolios for most investors when appropriate to do so, and use the same model portfolios as a core to build customized solutions for their suitable top clients, households and families. In addition, we believe they should treat taxable portfolios differently than non-taxable ones. Why? In our view, asset location work is becoming one of the most under-appreciated traits of top wealth managers and a competitive advantage.

Personalization: The internet, and technology in general, is about having a personal experience that focuses on how YOU want to receive information tailored to your preferences. The same is true for HUMAN relationships and interactions. As advisors, you need to understand how end investors want to work with you, and subsequently, tailor your services to match their preferences, NOT yours.

In other words: Do I want your quarterly email? No. Do I want to meet with you quarterly? No. Do I want an annual video conference to review our plan, priorities, portfolio and personalized communication? Yes. Market downturn … call or text me.

Get it, understand it and don’t fight it, as personalization requires the ASK and commitment to delivering a custom experience for your clients. Truth be told, that’s more important to many than receiving a weekly email with someone else’s content that goes straight to junk mail.

The bottom line

Planning, prioritization, portfolio alignment and personalization is a simple process to help investors understand the value you deliver as their advisor and behavior coach. When done right, price is what they pay, value is what they get!