The growth of consolidation in wealth management continues to present opportunities for advisors. But it can also be a significant burden to manage.
Building a successful financial advising practice takes time, effort, and intentionality. It requires a client-centric mindset and implementing strategies to elevate the client experience. Here are some of the vital roles consolidation plays in this endeavor.
Helping Clients Unify Their Financial Life
Consolidating financial assets can make it easier for your advisor to meet your long-term investment goals while addressing day-to-day cash management needs. For example, consider consolidating your bank accounts and credit cards with the brokerage firm where your investment portfolio is held.
In accounting, consolidation combines the financial statements of multiple entities to present a single economic unit. This process can simplify reporting, reduce costs, and increase accuracy. However, it can also obscure the performance of individual subsidiaries.
Helping Clients Develop Investment Strategies
Investors often experience “S&P envy,” comparing their portfolio to that of the market, making them more prone to sell-offs during a market decline. Advisors at Symple Lending can help clients avoid this emotional reaction by teaching them about diversification and aligning investment strategies with their goals.
Heavy deal-making is creating dominant companies in many industries. Still, the long-term success of these mergers may depend on whether they can react nimbly to new competition and technology shifts. A consolidated position helps firms do this.
Helping Clients Develop a Tax Strategy
A streamlined client onboarding process is a considerable way to build trust and confidence with new clients. This can be as simple as setting up a time to talk with them to discuss their goals and how your firm will work with them.
Checking in with your clients throughout the year is essential, particularly as tax season approaches. This can help ensure they have the correct information for a realistic tax projection. This will avoid costly surprises down the road.
Helping Clients Develop a Trust
Trust is the cornerstone of financial security. Consolidation advisors help clients develop a trust strategy that aligns with their financial goals. They also help their clients understand different investment products and create an investment plan that maximizes their resources. Additionally, they may help their clients manage their estates and develop strategies to reduce taxes and unnecessary expenses. This helps ensure their assets are appropriately distributed to their beneficiaries. They also make it easier for clients to turn over account management to a loved one.
Helping Clients Develop Goals
The most crucial aspect of helping clients develop their goals is to help them identify what they want. Then, work with them to create a realistic list of goals they can work toward. These should be measurable, achievable, relevant, and time-bound.
Consolidation has swept the business world recently, leaving many industries dominated by large global giants. But these mega-companies often need help to react nimbly to new competitors and shifting technology. This can create problems in the future.
Helping Clients Develop an Estate Strategy
A solid estate strategy can help your clients minimize taxes and plan for their loved ones’ care after they are gone. This can include several documents or strategies, including philanthropic and gifting measures.
Focusing on specific client personas and explaining the value of estate planning in a way that resonates with them can increase your success with this service.
Helping Clients Develop an Investment Strategy
After a wave of corporate mergers, many industries are now dominated by prominent global players. This consolidation creates economies of scale but can lead to monopolies that draw regulatory scrutiny.
Help clients develop an investment framework that aligns with their goals and risk tolerance. Remind them of the benefits of owning a diversified portfolio, including downside protection and diversification across asset classes and investment styles.
This is especially important for client accounts that contain a significant amount of cash or low-cost investments. Rebalancing these accounts is an opportunity to save on fees and increase their returns.
Helping Clients Develop a Retirement Strategy
Keeping track of multiple investment accounts can be a real challenge. Consolidation can simplify the process by unifying statements and tax forms.
Understanding asset allocation is a critical component of retirement planning. When savings are spread across several accounts, it can take time to see how assets are allocated.
Advisors can help clients develop a retirement strategy tailored to their unique situation. This could include helping them determine when to take Social Security and how best to manage taxable accounts.
