For example, we need to make sure clients are psychologically ready for retirement. And, if they are not, we need to help them develop a plan so they will be.
We also need to better equip clients with knowledge so they can be active partners in their planning journey. If we educate them about why their plan makes sense specifically for them and why it will help them reach their goals, they are more likely to take ownership.
Their education needs to go beyond just the big-picture view. For example, while clients don’t need to become stock experts, they should be schooled in areas related to their investment accounts—i.e., the efficient frontier, the critical concerns of long-term investing and the proper order of account depletion in retirement.
For advisors, looking beyond their retirement accounts allows you to make sure every aspect of those accounts is in the clients’ best interest. For instance, during an estate planning review, you might discover an ex-spouse is still the named beneficiary of an IRA even though the client had changed their will. Your client will likely be thankful that a former spouse doesn’t end up the lucky recipient of a windfall. Or, before you recommend a long-term care insurance policy, you’ll know whether it makes the most sense in light of a client’s retirement account assets and projected income.
The skills needed to become a successful comprehensive wealth advisor today are both broad and deep.
The industry will continue aligning more closely with full fiduciaries and embracing a more client-focused approach to our business as more and more people turn to us for help. Advisors who embrace the sophisticated skills and implement the processes and protocols of comprehensive financial planning will be those who best meet a fiduciary standard—and then some.
John Enright, an Advisor Today Four Under Forty Award recipient, is the co-founder of the CWAnetwork.com and the creator of the Practice Management Blueprint, a client-focused planning system designed by advisors, for advisors. Follow him on Twitter at @CWAnetwork.