Financial advisors help investors untangle the knot of their financial lives. They help clients draw a line from where they are today to where they want to be and then provide financial guidance to get…
Financial advisors help investors untangle the knot of their financial lives. They help clients draw a line from where they are today to where they want to be and then provide financial guidance to get them there. Financial advisors can be a significant part of their clients’ entire lives.
“As retirement planners, we want to be there for them throughout the remainder of their lives, and it’s important for me to make sure I’m not just the guy who handles their money,” says Andrew Wood, a retirement planning advisor with Daniel A. White & Associates in Middletown, Delaware.
There’s a common misconception that financial advisors spend all of their time studying investments. While investment planning is an integral part of the job, it’s often not the central part of an advisor’s daily duties.
Sonya Ranker, a certified divorce financial analyst and certified financial planner at Questmont Strategic Wealth Advisors, estimates 30 percent of her time is specific to investments. “The rest of the time is more advanced planning and goal strategizing,” she says. “I review tax returns as much as I review investment statements.”
Beyond investment planning, what financial advisors do can include:
Financial advisors meet with current and prospective clients to assess their financial situations and create plans for their futures. When not in front of clients, they’re often preparing for client meetings, staying up-to-date on market events, working with other professionals, and marketing their services.
Financial advisors spend a majority of their time meeting with and talking to investors. Clients are “the engine of the business,” says John Harris, managing director of South Florida-based Coral Gables Trust Company. “We have to make sure our clients are getting what we promise and that they’re satisfied.”
To this end, the first and most important thing he does everyday is address any current or prospective client needs. “You always want to differentiate yourself in this business,” especially if you’re a smaller firm, he says. Responsiveness is one way to do that.
Client meetings are often spent “learning about their situations, and putting together a plan of action to improve their situation and help them to reach their goals,” Wood says.
With existing clients, his goal is to uncover anything that’s changed in their situation and if adjustments need to be made to their financial plans. For prospects, he spends “a great deal of time just learning about their unique situations, what they’re looking for, and what they need,” he says.
“It always comes down to the goals the client has outlined,” Ranker says. Their financial goals will shape the trajectory of the meeting and the background planning that goes into preparing for it.
Background planning for meetings is where the investment analysis often comes into play. Preparation involves running diagnostics on client plans and researching investment solutions.
“We also spend time writing articles and creating material that can be used during client meetings or presentations,” says Allison Vanaski, a senior financial planner and VP of Investments at Arcadia Wealth Management in Smithtown, New York. Financial advisors are as much educators as their are advisors.
The biggest role Ranker takes on on a day-to-day basis is managing client behaviors and perspectives. “Most of the information people get is from the news,” she says. “They get wrapped up in the emotion of what’s happening on a day-to-day basis and it separates the money and the performance from their actual life goals.” It falls to advisors to educate their clients about market cycles and volatility.
Bob Harkson, a chief financial planner at Phase 2 Wealth Advisors in Gig Harbor, Washington, spends most of his time preparing for meetings. “I also spend a lot of time studying areas related to retirement planning, like product knowledge, taxation and economic news,” he says.
Staying up-to-date on market events is an essential part of the job. When not working directly with clients or other team members, Vanaski is often reading up on current events and news that could impact her clients, or researching better ways to serve those clients. She averages two face-to-face client meetings each day, but 15 to 20 phone calls every day.
“It’s not all client phone calls,” Vanaski says. “We’re constantly working with accountants, attorneys, insurance agents, to brainstorm about client situations or review something they’re working on for our client.”
These other professionals are called centers of influence. They’re the experts who are advising clients in other areas of their lives.
Centers of influence can be key sources of client referrals for advisors. For instance, when a woman wants a different advisor than her ex-husband following a divorce, she may ask her attorney or accountant for a referral.
Harris spends a lot of time “right away, every day” ensuring those “important centers of influence are satisfied and taken care of,” he says. “If they have open questions about one of their clients, we make sure we’re addressing those.”
It’s all about marketing and keeping the business “engine” fueled through constant outreach and engagement. “Without a systemized marketing and growth plan, growth is inevitably quite difficult — much like the saying ‘if you aren’t growing you’re dying, ‘” says Dan Simon, a retirement planning advisor with Daniel A. White & Associates. His three-advisor firm holds two educational seminars a week on average to draw in new clients.
“The most successful financial advisors are very active and will be doing several events every week,” be it breakfasts, lunches, after-work events or even weekend outings, Harris says.
What financial advisors do always comes back to their clients. Every task is done with the goal of improving their clients’ financial lives. This can be challenging when everyone’s life situation is unique. To this end, many financial advisors choose to specialize in a particular niche of client.
A specialization “allows you to become an expert in solutions that serve that specific market, distinguishing yourself from the firm down the street,” Simon says. His firm focuses on retirement income planning.
The types of financial advisor specializations can include:
— A particular client group, such as women, teachers, or millennials.
— A type of planning, such as retirement planning, estate planning or insurance planning.
— An investment style, such as socially responsible investing or income investing.
“On the other side of that, gaining expertise in multiple areas is part of what makes a financial advisor credible,” Harkson says. “Advanced certifications have helped me significantly to expand my customer base and give those I serve better advice.”