As independent financial advisors, our success is directly tied to our ability to motivate clients to take action. Have you ever encountered a situation where you meet the ideal prospective client, present them with an excellent financial plan, but they fail to take action to implement it? It can be frustrating, leaving you puzzled and wondering what went wrong.
To avoid such situations, I’d like to share some ideas on how to create a clear and effective planning process that encourages clients to take action. Before we begin, it’s essential to understand why individuals who appear to be ideal clients often hesitate to take action. I’ve observed that some may be overwhelmed by excessive data or jargon. For others, the solutions presented may not be fully understood, leading to more questions and paralysis in making a decision. Feeling overwhelmed or uncertain will ultimately prevent them from taking action.
As advisors, we often believe that our final planning meeting is where things went wrong. However, I’ve come to the realization that the root cause of this problem lies in how we presented our process during the initial meeting. If, in the first meeting, a prospective client is unaware of how we can assist them and the steps that will be involved, we are setting ourselves up for disappointment. We are building a plan that won’t motivate action.
I’ve found the following process to be an effective way to show a planning process that offers a prospective client a clear, actionable path. This process involves three simple steps.
The first step is to satisfy a prospective retirement client’s cash flow needs with the least amount of assets possible. The objective is to create the most amount of excess funds as possible. With the Gestalt Method of financial planning, we implement this by using income annuities that offer guaranteed income with the least amount of deposit. Then we pair the Portfolio Waterfall investment strategy with the income annuity to satisfy the remaining income needs for monthly and annual expenses.
The second step is to help the client identify the purpose of funds not needed for providing income. Generally, there are only four possible options for excess funds. Spend them. Reposition
them to de-risk their plan. Fund a legacy plan. Or reinvest them for the future. The worst option is not having a purpose for these excess funds.
The third step is to make the plan as tax-efficient as possible. By default, a financial plan with no attention to tax management will result in clients paying too much in taxes. As advisors, our job is to identify potential tax-saving opportunities and then help our clients communicate with their CPA. These opportunities could range from maximizing the client’s current tax bracket to creating a comprehensive legacy plan involving trusts and charitable donations.
In conclusion, our success as independent financial advisors hinges on our ability to guide clients through a clear and actionable planning process. By understanding the common barriers that prevent clients from taking action, such as being overwhelmed by data or unclear solutions, we can tailor our approach to address these challenges effectively. The three-step process outlined—focusing on efficient cash flow management, defining a purposeful use for excess funds, and optimizing tax efficiency—provides a structured path that empowers clients to move forward confidently. By implementing these strategies, we not only enhance our clients’ financial well-being but also strengthen our professional relationships, ensuring that our financial plans translate into real-world action and lasting impact.
If you would like help crafting your three step planning process, please contact me using the information below.
Joshua L. Curtis, Managing Member
josh@gestaltfinancialgroup.com
402-436-2596
