By Mike Gertsema, CEO & Wealth Advisor
I was recently referred to a new client couple and did a virtual zoom meeting since they lived out of Missouri. I’ll call them Bob and Julie.
I’m thankful that technology allows us to meet people online so we can all put a face with a name. It also helps because we’re not hiding behind a mask, so we can see facial expressions and emotions.
I was struck by Bob and Julie’s first statement: “We were told that you are a completely different investment firm and you could help us with our retirement.”
Being able to illustrate retirement options, different retirement income amounts, when to start taking social security benefits and how to maximize their benefits was just a start for us. Once they realized that the plan is customized specifically for them and they could add in “what-if scenarios” as we were illustrating projections, you could see their excitement.
A What-If Retirement Income Scenario
We ran a what-if scenario involving Bob and Julie buying and then renting out a vacation property in Florida, increasing their retirement income for the first 10 years of retirement.
With our ability to run simplified reports of their income tax returns, we were able to show them how to make income tax decisions in a preemptive manner.
This allowed them to see ways to minimize their income taxes short term and long term – which helped us make decisions for estate planning and leaving a legacy to the kids.
One Piece Can Move All the Others
It is interesting how one decision influences the other areas of the financial plan. This also shows that making a decision without consideration of the total picture can be detrimental to a successful outcome.
To make a lot of Bob and Julie’s hopes and dreams come true we discussed one of the main ingredients: the investments and risk management of the investments. They were able to see a “stress test illustration” of the risk associated with their portfolio.
Measuring the risk and reward is critical to their success, not to mention avoiding the stress of volatile markets.
Continuing the Relationship
The exciting part of working with these clients is that the financial planning is only the beginning of a long-term relationship. Since we do not charge commissions and are compensated based on the amount of money we manage, the better they do, the better we do.
We will continue to meet on an ongoing basis, updating all the information, and do it all over again. Technology has really helped us advance with helping our clients make better decisions, with much more information, and providing much more value.
These clients were referred to us because of the information, advice, and service we provide above and beyond investments. They were paying the same fee to their advisors and not getting anything in return but the investments.
No retirement planning, tax planning, no risk assessment, and no estate planning – just the portfolio’s performance numbers and market information once a year comparing them to an index.
How Would You Grade Your Advisor?
This all leads to their initial statement: “We were told that you are a completely different investment firm, and you could help us with our retirement”.
The public perception is all investment firms are the same – but “different” can be good.
The initial meeting went extremely well, and it’s been a very rewarding experience working with this couple because we are able to provide so much information and value to our relationship with them.
And although we pride ourselves on our service and the value we provide our clients, it’s important for clients to assess if their advisor is right for them. I created a report card for clients and prospects to complete on their financial advisor.
I hope you find it beneficial. Fill it out below:
| A | B | C | D | F | |||||
Financial Planning |
|||||||||
| Yes | No | ||||||||
| Is your advisor a Fiduciary | |||||||||
| Does your advisor provide financial planning | |||||||||
| Do you receive a hard copy of the plan | |||||||||
| Is it updated & reviewed annually | |||||||||
| Can it be illustrated digitally | |||||||||
| Can you add “what if scenarios” | |||||||||
| Is there an additional charge |
7 Yes = 100% A
6 Yes = 86% B
5 Yes = 71% C
4 Yes = 57% F
Anything less than 4 Yes = F
| A | B | C | D | F | |||||
Tax Planning |
|||||||||
| Yes | No | ||||||||
| Does your advisor ask for your tax returns | |||||||||
| Does your advisor do income tax planning | |||||||||
| Does your advisor provide tax strategies | |||||||||
| Does your advisor collaborate with your CPA | |||||||||
| Is your adviser doing a multiyear approach to tax planning |
5 Yes = 100% A
4 Yes = 80% B
3 Yes = 60% D
2 Yes = 40% F
Anything less than 2 Yes = F
| A | B | C | D | F | |||||
Investment Planning |
|||||||||
| Yes | No | ||||||||
| Does your advisor review investment strategies | |||||||||
| Does your advisor provide risk analysis | |||||||||
| Do you know your risk/reward | |||||||||
| Is tax efficiency part of your investment strategy | |||||||||
| Is your portfolio tailored to your financial plan |
5 Yes = 100% A
4 Yes = 80% B
3 Yes = 60% D
2 Yes = 40%F
Anything less than 2 Yes = F
| A | B | C | D | F | |||||
Estate Planning |
|||||||||
| Yes | No | ||||||||
| Does your advisor provide estate planning | |||||||||
| Do your investments have beneficiaries | |||||||||
| Do you have a tax plan for your estate | |||||||||
| Do you know how your estate will flow to your beneficiaries | |||||||||
| Will your assets avoid probate | |||||||||
| Do you have a durable power of attorney |
6 Yes = 100% A
5 Yes = 83% B
4 Yes = 67% D
3 Yes = 50% F
Anything less than 3 Yes = F
| A | B | C | D | F | ||||
Portfolio Reviews |
||||||||
| Yes | No | |||||||
| Is your financial plan updated in reviews | ||||||||
| Are your goals discussed & reviewed | ||||||||
| Do you review the risk assessment of your portfolio | ||||||||
| Do you review your tax strategies | ||||||||
| Is your portfolio review a sales pitch |
5 Yes = 100% A
4 Yes = 80% B
3 Yes = 60% D
2 Yes = 40% F
Anything less than 2 Yes = F
| A | B | C | D | F | ||||
Communication / Current Information |
||||||||
| Yes | No | |||||||
| Does your advisor provide weekly commentaries | ||||||||
| Is the communication relevant information | ||||||||
| Is your advisor accessible | ||||||||
| Are you able to email, call, or text | ||||||||
| Does your advisor have a website | ||||||||
| Is it updated with current/relevant information | ||||||||
| Are you able to schedule meetings online |
7 Yes = 100% A
6 Yes = 86% B
5 Yes = 71% C
4 Yes = 57% F
Anything less than 4 Yes = F
If you find that you’re getting all the information, service and value – congratulations! We want nothing less than the best for you. But, if you find yourself wanting a second opinion, feel free to contact me.
