Tips for taking year-end client meetings to the next level

Engaging clients on topics beyond the usual agenda items can position both advisers and investors for long-term success

Nov 28, 2018 @ 12:19 pm

By Michael Kim

In the final months of 2018, many financial advisers will be planning year-end check-in meetings with their clients. There are key investing strategies and considerations that are commonplace discussion items in these meetings, such as annual charitable donations and tax-loss harvesting. However, savvy advisers can move conversations a step further by taking the time to engage clients on topics beyond the usual agenda items.

Here are a few tangible tips for how to close out the year in a manner that positions both advisers and investors for long-term success.

Get ahead of volatility

To enhance the productivity of year-end client meetings, advisers can bring up the subject of the likelihood of future market movements and provide expectation-setting context for the year ahead.

For example, the recent midterm elections give advisers an opportunity to educate their clients on the historical data about economic environments post-election.

Despite the short-term volatility that typically surrounds midterms going back to 1946, the S&P 500 has gained an average of 13% in the year following the election. With this information in mind, investors will be more likely to feel comfortable staying the course in the face of volatility in the year ahead.

Address rising rates

Similarly, advisers can think about heightened investor awareness of the Federal Reserve's well-publicized rate hikes and how savings accrue in the current market environment.

Given that it's widely expected that the Fed will raise rates again in early 2019, advisers can take advantage of current industry conversations to discuss clients' idle cash balances while once again setting expectations for the likely economic path to come.

In doing so, advisers may find that clients are open to potentially higher-yield investment options and can appropriately tweak portfolio strategies to position clients for success in 2019.

Elevate the typical tax conversation

Tax strategy is a common consideration during year-end planning discussions, but the recent tax legislation created a new layer of nuance as well as a timely opportunity for advisers to demonstrate their ability to keep clients on track in a changing industry landscape.

For example, under the new tax law, many investors who previously benefited from itemizing their deductions will now find it advantageous to choose the standard deduction or try to bundle deductions for multiple years into one calendar year.

Moreover, because of increased gift and estate tax exclusions for individuals, clients may benefit from more aggressive gift and estate planning. There's no need to explain every nitty-gritty detail of the new legislation, but showing clients that you're incorporating the latest tax changes into their personal financial plans can pay off in long-term relationship-building and investor education.

(More: 5 year-end tax planning strategies)

Visualize income planning

As client demographics shift, more and more investors will be relying on their advisers for monthly income distributions. Advisers can use year-end meetings to talk with clients about their income needs based on their expenses and ensure that a plan is in place to help generate the corresponding level of income. If possible, they can take these conversations a step further by leveraging visual modeling tools, showing clients how factors such as risk tolerance, market movements and various time horizons could affect income distribution in an intuitive fashion.

As an added benefit, research suggests that most investors currently desire conversations with advisers that use these types of digital tools.

Planning is an important part of an adviser's business, and the forthcoming new year is an apt time to reflect back on 2018 and forge a solid plan for 2019. By approaching year-end meetings as an opportunity to be proactive and elevate typical conversations, advisers can enter into the year ahead well-positioned to demonstrate their value, create effective and well-tailored financial plans, and position investors to progress toward their financial goals.

(More: Solidify client relationships in volatile times by overcommunicating)

Michael Kim is executive vice president and chief client officer at AssetMark Inc., an SEC-registered investment adviser.


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