7. The younger client who sees no need to own life insurance. This client is one of your smaller relationships. They follow advice, investing through dollar cost averaging via automatic debits to their checking account. They are a dual income family with few deductions. They just had a baby. What happens if one or the other parent dies?
Financial Planning: Your client should be considering life insurance. Ideally, it’s whole life that builds cash value over time. If the client dies, the policy pays out a lump sum that can be invested for income replacement. Hopefully your client lives a long life, and the policy builds cash value for the future.
8. The client who doesn’t open their statements and won’t meet for portfolio reviews. In my opinion, I thought The Great Recession cured people of this malady. Most advisors have a few clients who don’t pay attention, follow advice or are difficult to reach. They ride through a few down months and suddenly pay attention. They are shocked their assets have declined significantly. It must be the advisor’s fault!
Financial Planning: The issue is neglect on the part of the client. Ideally the advisor kept records of the times they attempted to contact the client, or the client declined the opportunity to meet for a portfolio review. (I know my advisor keeps records!) The client has lost money. They have not realized they have a degree of responsibility in the relationship. Hopefully the advisor has some “what if” conversations early in the relationship.
In each of these situations, the client can suffer significant losses. In many cases proactive financial planning can help. This is a way advisors show their value, but the client needs to be receptive.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor is available on Amazon.