Industry association leader says economic challenges are the ideal time to deepen client relationships
The ongoing uncertainty in the Canadian economy and globally is unsettling for clients who will benefit from advisors’ support – so make sure you demonstrate your true value.
Greg Pollock, president and CEO of Advocis, says that concern about inflation and other challenging economic conditions can lead to investors making rash decisions about their finances, fearing that their long-term goals are being upended.
These decisions may include “everything from selling off investments for the future, to taking money out of accounts that have penalties for earlier withdrawals, or even making large gifts to family members that can undermine the financial security of the family itself,” Pollock wrote in an article on the Advocis website.
This is one of the key things that an advisor can do for a client in turbulent times, helping them avoid making decisions that they may later regret and that could cost them dearly, by bringing the benefit of experience and historical evidence to the table.
Budgeting is another important area that advisors can leverage to show added value to clients. This may not be something that they have discussed before with clients, who may be more likely to speak to their advisor about major decisions and life milestones such as retirement solutions, life insurance, or children’s education.
Introducing tools that can help clients navigate tighter spending ability and other areas of better financial literacy are valuable in broadening the advisor-client relationship.
Inflation hedges
The third area that advisors can address is protecting against inflation with a diversified portfolio and investment in the sectors that historically maintain value when costs are rising.
“The key value of the advisor in this case, however, is that many of these strategies are not only things many clients might not know about or understand the nuances of, but which also might require changes and shifts in their overall financial plans – changes that a professional advisor will understand and can communicate clearly,” commented Pollock.
Helping clients to understand professional qualifications, such as Professional Financial Advisor (PFA™) and the Chartered Life Underwriter (CLU®), can be particularly helpful says Pollack, especially in helping clients avoid acting on advice from friends and family who may have been misinformed themselves.
“By helping clients avoid rash decisions, guiding them into revising their strategies to manage the impact of inflation on their long-term goals and working with them and their families to improve their financial literacy, they can make a more significant difference during challenging times than ever,” concluded Pollock in the article.
