Trending
Written by: Hannah Shaw Grove | Foundation Source
The markets are especially difficult right now and that can cause advisors to focus narrowly on things like intraday movements and individual securities – and forget the humans behind the volatility. Your HNW clients rely on you for holistic guidance. And the work you’ve been doing together prepares them to weather volatile times like these and stay focused on their long-term goals.
Remember to step back periodically so you can see the big picture, because certain things remain constant regardless of what’s happening in the market – and each of these are opportunities to connect with your clients.
The following are six areas of discussion (with reminders and insights) for you to raise with your clients to help them – and you – see the forest for the trees during these challenging times:
The Wealth Transfer is Still Underway
- Whether your clients will be passing assets to their heirs and beneficiaries or receiving assets, preparation is required.
- Moments of volatility can be a good time to update financial plans, wills and estate plans to ensure they reflect your clients’ current priorities, along with their key tax management and philanthropic objectives.
Taxes are Always Certain
- Extreme volatility is also an excellent opportunity to revisit risk tolerance with your clients and identify portfolio adjustments that will allow them to take advantage of value investments, harvest losses and minimize capital gains taxes.
- If taxes are of particular concern, it might make sense to explore a multi-disciplinary tax strategy that includes investment, legal and philanthropic elements such as a formal charitable giving vehicle.
Disasters Do Strike
- As we enter the season for weather-related disasters, now is a good time to check in with clients who are in flood zones and areas that are prone to wildfires, tornadoes, hurricanes, and other dangerous conditions.
- Have you conducted an insurance review with your clients?
- Are their physical and financial assets adequately protected?
- Do they want to make charitable contributions in times of urgent need?
Caring is Intrinsic
- There’s ample evidence that people, including your clients, are charitable in every type of environment.
- Even as GDP and the economy suffered, donors of all levels rallied to support pandemic relief efforts as well as social and racial justice causes.
- One in three households increased their giving to support needs related to the pandemic.
- Charitable giving and overall wealth strategy go hand-in-hand for the wealthy.
- Affluent households have many choices about how to make charitable gifts now and for the future. In 2020, the use of giving vehicles increased and significantly more affluent households participated in sustainable and impact investing.
- Focusing on the needs of others has many documented benefits for the giver and the receiver – and could provide a welcome distraction from doggedly tracking market movements.
Illness Requires Attention
- Clients dealing with chronic illnesses and short-term ailments – personally or within their extended family units – have special needs and concerns that don’t go away when the market is erratic. Now is the time to reinforce that you understand and support their priorities.
Business is Still as Usual
- The responsibilities of business owners don’t change when the market is fickle. If anything, they get more nuanced as the range of consumer responses emerge.
- Expansion and succession initiatives that result in acquisitions and transactions still call for comprehensive preparation and planning to ensure optimal outcomes.
- Clients who are thinking about the next chapter may want to discuss how their financial plan and their lives will change in a post-transaction world.
Connecting with clients in difficult times is one of the most important things an advisor can do. It demonstrates that you don’t shy away from hard conversations, it assures that you’re with them through thick and thin, it creates opportunities to cement and enhance your existing relationships, and it reminds them that you’ve got your eye on their long-term objectives.
Related: The Top Three Takeaways About Family Foundation Endowments