Financial advisory firms often spend the last few months of the year advising clients about year-end tasks they must complete. Generally those tasks involve making gifts – be they family-related or charitable – to ensure favorable tax status. There are also a significant number of items to remember for small business owners to ensure proper year-end accounting and accruals. But few advisory firms approach the New Year with the concept of creating new plans for their clients. This may be the year to begin to proactively reach out to customers to update their financial plans. 

Spectrem’s research has consistently shown that investors want a financial plan. In fact, our recent report, Parenting and Financial Issues, showed that 87% of investors with dependent children indicate that a dedicated and regular savings plan is very important. Seventy-one percent of wealthy households who do not yet have dependent children agree with that philosophy and 92% of those with non-dependent children, the older generation, support the importance of savings. In fact, 70% of investors expect assistance from their advisor in developing a financial plan.        

As you can see above, investors expect assistance with not only developing a financial plan but with tax planning, estate planning and multiple other key events within their life. Yet while most investors meet with their advisors two to four times each year, our research indicated that the largest percentage of those meetings are spent discussing investments rather than the financial plan. Certainly the financial plan is referred to but investments tend to take up the largest part of the conversation. Is this because investors care more about investments or is it because the advisor feels more comfortable discussing investments?

 

With the New Year upon us, it’s time for advisors to ensure that they are discussing the issues that are most important to clients. In fact, there are specific times within an investor’s life in which they would like to rely more upon their advisor. In our recent report, Defining Financial Planning, Spectrem found that there are many circumstances in which they would like more assistance from their advisor. The most important are when there is a marital change or when the health of the investor or his/her spouse becomes poor. Other important times include the beginning and end of college as well as when children become financially independent. 

Start the New Year off right. Determine if any of your clients are experiencing any of the above-named events (it may be more than you think). Contact them. Tell them it’s time to revitalize their financial plan. If you have clients without a plan, now is the time to institute one. Investors are never too young or too old because proper planning for spending, saving and investing is always important. 
Finally, because 2020 is an election year, it is critical to reach out to clients to reassure them that you have a close eye on the financial markets, and whatever the outcome may be, you will be helping them to make the right financial decisions. 
May you have a joyous Holiday season and a Happy New Year!