With October being Financial Planning Month, we wanted to provide some helpful information for when Advisors meet with their clients to advise them on how to better manage their finances and investments. Here are four basic tips that you can share with your clients as they work towards their goals of being more financially stable in the present and can help solidify their financial futures.
1. Make Sure Clients Set a Budget:
It is important that your clients budget their money, so they are not spending beyond their means. This can include cutting out needless/frivolous spending (streaming services, eating out, etc.,) optimizing and/or reducing utilities to lower costs, and prioritizing paying down larger debts and debt with higher interest rates to evert costs, etc.. Clients might want to utilize technologies, such as Mint or Rocket Money, that break down an individual’s monthly spending habits and identify what can be cut or optimized. These cost-cutting measures can increase a client’s monthly budget so they have the ability to invest and save for the future. Additionally, you can have your clients create an investment budget where your clients would invest a percentage of each paycheck, so they can work towards increasing and growing their portfolios.
2. Have Them Create Target Goals:
Work with your clients to create a plan for where they want to be in the future. Set goal markers 6 months, 1 year, 5 years, 10 years, but make sure these goals are realistic and achievable. Some examples can be paying down their student debt in 5 years, Having X amount in savings by the end of the year, etc. You must also work with them on how they will execute a plan and what steps they will have to take. Also, you’ll want to provide different avenues/plans for them to achieve their goals. Setting markers along the way can make their ultimate goals seem more achievable and make reaching the end less daunting of a process.
3. Align Their Investments with Their Beliefs & Values:
Although the goal is to increase profits for your clients, this shouldn’t come at the cost of ignoring their beliefs. Take the time and have a conversation with them to see if you can align their investments with their values. Some clients might have an Environmental, Social and Governance (ESG) or religious focus, while others might face the dilemma of investing in companies or industries that don’t fit their moralities or ideals. For example, VFG’s Impact group is a group of advisors who’s sole focus is clients with an ESG and Impact focus making sure their clients have an opportunity to make an impact through their investments.
4. Continually Review and Adjust:
Re-evaluate and rebalance financial goals, never have a rigid plan. Economies, markets and industries can all be volatile and can be affected in many different ways and you may have to pivot because of this. When you see things are not going as forecasted don’t be afraid to change/correct course, but always make sure you consult with your clients and that they approve of the direction you are taking them in.
Financial Planning Month is a time when we can appreciate the steps we need to take to better our financial lives. These four simple, yet efficient, steps can be the cornerstone for dealing with clients. Following them will not only help them to stabilize their financial future but can limit stress without sacrificing their morals, leaving them satisfied.