Displaying items by tag: clients

In an article for InvestmentNews, Steve Randall shares some insights from a recent study conducted by Dynasty Financial Partners of investors who work with an advisor and have at least $500,000 in investable assets. 

It finds that many wealthy investors seek out an advisor following a major life event such as a change in employment or inheritance. Interestingly, 57% end up working with the first advisor they meet. This is an indication that advisors should invest in efforts that increase their visibility especially among this set. 

One caveat is that while high net-worth clients are quick to choose an advisor, they are also prone to switching especially if they feel a lack of trust or generating value. For high net-worth clients under 45, 61% had changed advisors. 

Another finding from the research is that referrals remain an important source of new clients. About a little more than half of new clients come from family and friends with another quarter coming from a professional colleague. About a quarter of new business came from social media, blogs, or other online platforms. 

Finsum: A recent survey of high net-worth investors by Dynasty Financial Partners has some interesting insights for financial advisors.

In an article for InsuranceNews, Ayo Mseka shares some tips on what advisors should do during the summer when existing clients are hard to reach, and prospecting for new clients is even tougher. 

According to Brian Haney, advisors should embrace the downtime and use it as an opportunity to reassess your practice and client relationships. It’s also a time for longer-term planning and thinking about the firm’s future. It can also be used to refine processes and ensure that daily tasks are aligned with the long-term vision.

Another recommendation is to use the summer months to invest in building new relationships and deepen relationships with existing clients. This can include activities that involve the client and their family and even induce them to invite other potential prospects. 

The final recommendation is to embrace the downtime and ‘bank’ some rest and leisure time especially given that the pace and intensity of work will increase once summer ends. But, the summer also does offer some unique opportunities for client relationships or prospecting efforts given the abundance of sponsorship opportunities during the summer months for events, concerts, or festivals. 

Finsum: The summer months are typically slow for financial advisors. Here are some recommendations to best take advantage of this period.

In an article for ETFTrends, James Comtois discusses how direct indexing can help investors reduce their tax bill by harvesting tax losses which then can be used to offset capital gains in other accounts. The proceeds from these sales are used to make investments in assets with similar factor scores to ensure consistency with benchmarks.

However, tax-loss harvesting is not a strategy that can be used by investing in an ETF or a mutual fund. In fact, direct indexing is one of the main ways that investors can maximize tax-loss harvesting. This is because with direct indexing, investors own the actual components of an index. It also allows for greater customization as advisors or investors can choose to alter the holdings to suit their personal situation.

At regular intervals, the portfolio is scanned for tax-loss opportunities. By automating the process, it ensures that opportunities aren’t missed to lower an investors’ tax bill. Increasing the frequency of these scans also leads to more alpha. According to research, tax-loss harvesting can add between 20 to 100 basis points of performance. 

Finsum: One of the main benefits of direct indexing is that it allows investors to reduce their tax liability while allowing investors to realize the benefits of index investing.

In an article for SmartAsset, Rebecca Lake CEFP shares some tips on successful retirement planning for financial advisors. While advisors spend so much time and thought into their clients’ financial goals, they don’t do the same for themselves especially given the complications of succession planning. Additionally, advisors can maximize the value of their practice by taking some proactive steps.

The first step is to figure out your ideal outcome and then create a plan to achieve the goal. The earlier that you can start taking steps towards this goal, the higher your chances of success. This could mean thinking of how to transition the business whether that means selling to employees, the highest bidder, or passing the business on to your heirs, and how it will impact clients and employees.

The second step is to figure out the value of your business and to consider getting a professional appraisal. This will help you make better decisions so that you can ensure a successful transition. 

Finally, advisors have to consider their own personal financial situation that is independent of their business to ensure a comfortable retirement. This includes all the major components of planning such as retirement contributions, insurance, life insurance for family, budgeting during retirement, etc.

Finsum: Many advisors don’t spend enough time on their own retirement and succession planning. However, this is an increasingly important issue given the aging of the wealth management industry.

In a piece for FutureVault, Kristian Borghesan covers some important items that financial advisors need to consider for succession planning. This type of thinking is increasingly important given the boom of M&A in the space in addition to the aging of advisors in the industry.

Advisors want to ensure a smooth transition in their business to the next generation of advisors while ensuring that client satisfaction is not sacrificed. Additionally, both parties need to be aware of regulatory requirements as well as potential impacts on other employees at the firm.

The goal of succession planning is to ensure continuity of the business, retain clients, preserve the value of the practice, and transfer skills and expertise. Advisors and acquirers have a variety of options to choose from when it comes to structuring the transaction. Increasingly, many advisors are choosing to stay on as employees in a limited capacity to ensure a smooth transition. 

So much of the value of a financial advisor practice is due to the clients. Therefore, there needs to be a plan and transition period to ensure that relationships are successfully transferred to the new team. Some recommendations include joint meetings and a slow transition of responsibilities while maintaining active communication with clients during the transition process. 

Finsum: Succession planning is essential for advisors to ensure a smooth transition of their business and maximizing the value of their firm. Here are some important considerations.