You may have the passion and the knack to make it big as a financial advisor. However, financial markets are volatile and the world comes at you fast. You therefore need to invest in self growth, connect personally, and never stop learning.
Connecting on a personal level with your clients, especially those seeking your advice with retirement planning strategies or products such as IRAs, will help you earn their trust and business.
Here are 11 tips to help:
1). Comprehensive notes are a must
Document the dealings in detail, as and when they happen. Such documents are trusted more than those written later based on memory. Detailed documentation of every activity, even of the verbal instructions given by the client, holds great value in case of a dispute.
2). Make the client understand in their own words
Write down the client’s objective in a language which the client understands. Try to use the client’s own words. It assures the clients that you have understood their needs clearly, and thus helps you connect with them better.
3). There is no harm in saying no to clients and participants, if need be
If some clients don’t fit the gamut of your services, you should not hesitate to turn them away. It would be inappropriate to try and shape the client to match your services.
4). Be forthcoming about the risks involved in acting against your advice
If any of your clients choose to act against your advice, you should be proactive in explaining them all the risks involved. Also, to keep the dealings transparent, it is crucial to document the strategy suggested by you and the risks involved in not following that strategy. The documentation should be in a simple language, and should be signed by the client.
5). Clarify your services
Be very sure to explain the type of services you provide and what exactly they include. Most clients may not understand the difference between formal and informal advice. If you don’t clarify, you might find yourself accountable for providing advice you didn’t mean to offer.
6). Templated forms and documents should be flawless
If you have incorrect documents or irrelevant forms, your client might not trust you. In such situations, it becomes hard to convince them about the soundness of your services. Refrain from using complex jargon. Understand the level of your client’s financial literacy and prepare the documents accordingly.
7). Don’t rely blindly on tools
Risk profiling tools are not perfect. The strategy and asset allocation you propose should be in sync with the risk profile generated by the risk profiling tool. However, it’s up to you to look for any discrepancies and also make them clear to your client.
8). One advice does not fit all
Don’t forward the same strategy or product to every client. Some might have similar needs but even then, you should be careful enough to understand the nuances. This helps you better serve them.
9). Know and explain your products
Successful financial advisors understand and explain their products. You should be equipped with sound product knowledge. A product disclosure statement (PDS) alone won’t cut it. Also, the statement of advice (SOA) should have details about your discussion, rather than just being another copy of the PDS.
10). Regardless of your relation with the client, stay professional
Your client may be your relative, friend or associate. In such cases you should never shy away from dealing with them professionally. You should carry out all the formalities, document everything and inform them about any conflicts of interest, as you would with a client who is not related to you.
11). Stay humble and never stop learning
You grow when you learn. The initial years of your career would require you to don many hats—an administrator, planner, strategist and many others. These roles might have nothing to do with financial planning. The key here is to stay rooted, ask for help and deliver your best. Stay true to your intent of getting into this business.
Incorporate these tips and combine them with your passion to etch a brilliant career as a successful financial advisor.
Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, AZ. He has over three decades of experience working with investments and retirement planning, and over the last 10 years has turned his focus to self-directed accounts and alternative investments.