Mind The Gaps: Addressing Clients’ Concerns Beyond Investments – Episode 32
There’s a perception out there that affluent clients are being well served by their existing advisors and that the solutions they need are, by and large, already in place by the time we encounter these investors as potential prospects.
Guess what? It’s just not the case. In fact, there are some major gaps in wealth planning that exist—even among the wealthiest individuals.
That’s really good news for you. It means you have tremendous opportunities to demonstrate to HNW prospects that you can add real value to their financial lives and to the lives of the people they care about most.
KEY TAKEAWAYS
- A surprisingly high percentage of the affluent don’t have estate plans or asset protection plans in place.
- Position yourself as an advocate who can coordinate the efforts of an expert team.
- Go beyond investments when meeting with prospects—engage in deeper discovery.
FACE THE FACTS
CEG Insights surveyed more than 1,500 investors—the majority of whom have at least $1 million dollars of net worth—about the state of their wealth plans.
Consider these key planning gaps we discovered:
- Estate planning. Far too many affluent individuals don’t have an estate plan in place. Nearly half (48.8%) of those with $1 million to $2.9 million don’t have a plan—and among those with $3 million to $4.9 million, a full 40.6% lack a plan.
Even those with an estate plan in place might benefit from your help in this area. The reason: 38.3% of those with a plan told us their lives and/or wealth have changed since their plan was implemented. In such cases, revisions to the existing plan may be needed.
- Asset protection. Fewer than 20% of HNW investors have a formal asset protection plan. Even among the very wealthiest who have the most to lose—those with $10 million to $25 million in net worth—just 27.7% have one.
- Strategic tax planning. Only 38.5% of investors work with tax professionals to optimize their tax situations. They might have accountants and bookkeepers, but there’s no overarching plan to mitigate taxes most effectively.
INSIGHTS INTO ACTION
The message is clear: You have numerous and large opportunities to show many affluent prospective clients that you can help them address key areas of their financial lives that aren’t currently being taken care of—including wealth transfer, wealth protection and wealth preservation.
Some action steps that can help you do exactly that:
- Position yourself as an advocate. You’re not simply a financial advisor who manages portfolios. Part of your value proposition should be that you advocate for your clients’ best interests in diverse array of financial concerns—and that you do so as the coordinator of a professional network of specialists in key areas, such as estate planning and asset protection. That depth of talent and expertise is exactly what the affluent want—but too often, aren’t getting.
- Engage in deep discovery. Dig deep on advanced planning concerns when you have the opportunity to talk with affluent prospects. Seek to understand their situations, needs and goals beyond just investments and returns.
- Raise the key issues beyond investments. As you discover more about these people, raise the issue of how they might want to transfer wealth down the road, or the possibility that someone might try to take their wealth from them unjustly. By doing so, prospects will appreciate that you’re bringing up these ideas proactively—and they’ll see that you are an advisor who can delivered tremendous value to their financial lives.
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