Become one of thousands who can say... "Keir Got Me Through!" 1-800-795-5347

Tag Archives: building client relationships

What’s the Optimal Withdrawal Rate?

Bag with retirement savings

Traditionally, the recommended savings withdrawal rate for retirees has been four percent. However, a recent study found that individuals who take this approach have a fifty percent chance of outliving their savings.


The New Standard for the Withdrawal Rate


This research has spurred a lot of interest among financial advisors as to what a safe withdrawal rate actually is in 2015 and beyond. According to the same body of research, the figure is much closer to two percent than four.


Given that information, what can trained financial advisors do to help their clients? The answer to that question starts with understanding client’s’ behavior.


Here’s What Retirees Are Thinking About


As with any stage in life, there are pros and cons that go along with retirement. Two concerns commonly associated with retirement are outliving savings and dying. For someone who’s not retired, it’s easy to assume that either both concerns would have the same weight or that the latter would be what retirees think about the most.


Surprisingly, research has found that’s not the case. While only 30% of retired individuals worry about dying, a full 70% of this population regularly worries about outliving their savings. Given that large figure, it’s clear that this is an where retirees are actively looking for help from certified financial planners.


Taking a Dynamic Approach to Withdrawals


Retired people from all walks of life are looking to financial planning professionals for solutions to ensure that savings aren’t outlived. But due to the optimal withdrawal rate being half of what has traditionally been thought of as safe, advisors are just as interested in new solutions.


One option that is brought up on a regular basis and has been employed by some advisors is an approach that’s known as consumption-smoothing. The simple explanation of this strategy is it’s based around retired individuals adjusting their spending habits in response to the appreciation or depreciation swings of their assets.


Although it’s easy to understand the thought process behind this kind of strategy, it’s not something that has performed well in the real world. One issue is that a large percentage of the population simply doesn’t have the level of savings that’s needed for the approach to be effective. Another issue is this strategy involves too much ongoing work for retirees.


Due to the discovery of the flawed nature of the traditional safe withdrawal rate and the problems presented by strategies involving consumption-smoothing, a more appealing option for advisors and their clients to consider is one that involves dynamic withdrawals.


By exploring dynamic withdrawal strategies that make it possible for retired individuals to take advantage of tactics like self-insuring, advisors can help their clients figure out what approach is going to best protect against outliving savings.

How Simplification Can Help Advisors Increase Sales

Positive attitude word cloud

One of the most common questions that financial advisors have is what percentage of prospects should be closed after sitting down together. Although the exact answer may slightly vary based on who is asked for an answer, the general consensus across the industry is that the close rate for this scenario should be around 30%.


Advisors with a close rate significantly above this percentage should give themselves a pat on the back for already having their sales process nailed down. For advisors who are closing far less than 30% of the prospects they sit down with, this benchmark shouldn’t be viewed as a source of defeat. Instead, it should be thought of as an opportunity for significant improvement.


The good news for advisors who are currently below this close rate is there’s generally a clear reason why. That reason is the sales proposals an advisor is using for their investment proposal is too complex. As the financial planning industry has become more complex, many advisors have assumed that their proposals need to as well. This thinking has resulted in advisors presenting clients with proposals that are 30 or more pages in length.


What trained financial advisors forget is their proposal presents the last step before a client is closed. That means even if prospect has been properly qualified and all communication has been positive up to that point, an overly long proposal can overwhelm a prospect and cause them to get cold feet.


Here’s exactly what certified financial planners with proposals that are preventing at least 30% of prospects from being closed need to do to reach this benchmark:




This classic acronym stands for Keep It Simple, Stupid. Although it’s not the most elegant phrase, it’s a good reminder to not overthink and instead simplify. Advisors should keep in mind that making a proposal simple can actually take quite a bit of hard work.


2. Aim for Under 10 Pages


One of the reasons that proposals are so challenging to simplify is there’s a lot they do need to cover. So while it’s not realistic to attempt to make a proposal fit on 1 or 2 pages, keeping it under 10 pages is definitely something that can be done.


3. Use An Outline to Guide the Structure


A big part of striving for a simplified and shorter proposal is so potential clients can actually evaluate everything in it. Another way to help them do that is by using a clear outline as the structure for the full proposal. Putting the proposal in this format will ensure they don’t miss any important information.


4. It’s All in the Presentation


By getting a proposal down to an optimal size, it can be used as part of a strong sales presentation. At this point, the final step for an advisor is to practice and perfect their actual pitch.


By putting the above steps into action, financial advisors can transform their proposals from a roadblock into an asset that helps them increase sales.

What’s the Best Way for Advisors to Handle Client Disputes?

Break at business meeting


There are a lot of rewarding aspects of being in the financial planning industry. But that doesn’t mean everything is rosy for financial advisors. As with any profession, there are challenges that trained financial advisors have to face. And in some cases, advisors have to deal with very unpleasant circumstances and handle client disputes.


One example of a very unpleasant circumstance most certified financial planners have to deal with at some point in their career is a client who thinks their advisor harmed them. While advisors already act with a fiduciary standard, there’s no guarantee that every client will think that’s enough. The reality is if something goes very wrong for a client, chances are they’re going to blame their advisor.


When this occurs, it can create a significant headache for an advisor. It’s important to understand that the fallout from this type of situation can happen regardless of whether it’s the client or advisor who’s in the right. The worst case scenario is if a client escalates the matter to the point where it has to go to court. Dealing with an arbitration panel can also be a very stressful experience.


Financial Advisors Need to Be Proactive


Many financial advisors assume that if they treat clients well, communicate clearly and adhere to ethical standards like not misrepresenting any aspect of an investment, they won’t have to worry about any significant client disputes. Although that approach and desired outcome will hold true for the majority of clients, there are always going to be problematic clients looking for a financial advisor.


The best case scenario of working with a problematic client is they only waste an advisor’s time. The worst case scenario is this type of client drags an advisor into arbitration or an other legal venue. Since trouble clients present a lose-lose proposition, the best thing an advisor can do is learn how to avoid them.


Manipulative behavior, constant victimization, major delusions, radical moods or goals that are disconnected from reality are all signs of a truly problematic client. If any of these behaviors are exhibited during an initial consultation, the best action an advisor can take is politely declining to take on the individual as a client.


Despite their best efforts, it’s not always possible for an advisor to avoid taking on a dysfunctional client. There are plenty of examples of clients who don’t start showing the major warning signs of trouble until they’re already in a relationship with the advisor.


If major issues start to arise with a client, advisors need to go the extra mile to ensure they document everything. By having comprehensive documentation, advisors can protect themselves in the event that things get escalated to arbitration.


In addition to carefully documenting everything related to a problematic client, advisors shouldn’t hesitate to look for the right opportunity to amicably end their relationship. By being proactive with these kinds of actions, financial advisors can minimize their negative interactions and focus their energy on all of the things that make this profession so great.

What Do Affluent Clients Really Want From Their Financial Advisor?

Word Cloud Relationship Marketing

Financial advisors who are interested in working with affluent clients need to understand the specific needs of this segment of the population. The first need that affluent individuals have is being able to trust their financial advisor. While any client needs to have a level of trust with an advisor that’s giving them financial direction, this issue is especially important for people with a significant amount of wealth. That’s why a full 93% of wealthy clients are initially introduced to the financial advisor they end up working with through some form of relationship marketing.


What that means for financial advisors is although online marketing definitely has its place, it’s highly unlikely that it will lead to the acquisition of an affluent client. Getting on the radar of that type of client requires a different approach to marketing.


Affluent Clients Want to Talk About Their Families


Wealth isn’t something that only affects individuals. Instead, it shapes the lives of entire families. That’s why wealthy clients want to talk about their families with trained financial advisors. But what’s almost shocking is statistics show that less than 9% of affluent clients are offered discussions about family finance. This major gap between what affluent clients want and what they’re getting from most financial advisors provides a significant opportunity for certified financial planners who understand how to fill this need.


They Want An Ongoing Relationship


Surveys clearly show that the most affluent individuals want to meet with a financial advisor at least twice a year. However, as with the issue of discussions of family finance, many advisors are failing to provide this type of ongoing relationship. Even if a financial planning professional is used to only meeting with clients once a year and then doing everything else online, there’s no reason they can’t tailor their service to be more engaging with affluent clients.


Affluent Clients Are Looking for Direction and Guidance


Although some people have a misguided belief that wealthy individuals aren’t actively looking for direction and guidance for their investments, that couldn’t be further from the truth. A full 71% of households with investible assets of at least one million dollars are actively looking for direction and guidance in regards to making new investments.


Why are so many affluent individuals looking for the types of services that financial advisors can provide? The main reason is they understand the value in putting their money to work. And because affluent clients are often short on time, having a knowledgeable and trustworthy professional who can propose new investment options is an ideal situation.


While building a client list of affluent individuals isn’t something that’s going to happen overnight, there is plenty of opportunity within this space for advisors who understand how to position themselves.