3 steps to calming clients

By Robert Abboud | November 13, 2012 | Last updated on November 13, 2012
2 min read

You can’t blame clients for being scared. The last 12 years haven’t been fun.

Economic turmoil is completely out of your control, so how can we calm clients?

1. Do a retirement projection

Projection calculators can be found on the web or you can use the software your dealer provides, but consider using one and sticking to it. When you have a retirement projection, it allows you to set a goal and see where you stand vis-à-vis that goal. Sure, many clients may be behind target, but until you run the projection you won’t know how far behind.

Read: Perpetual distribution rates

2. Lay out the facts

Now that you have a retirement projection, check to see if the client’s on target. If not, run new numbers with lower retirement income requirements or add part-time income at their original retirement age that will last five to 10 years.

That way, you can show how different scenarios will affect retirement and still let them stop working at a certain point. You’ll also want to stress test the retirement plan to see what happens if returns drop, or the client needs to make an unexpected withdrawal.

Read: Lifelong retirement income: the zone strategy

3. Reset expectations

During these tough times, we have to show clients the real numbers. The thought of pushing off retirement from 55 to 59 is much easier to digest than not retiring at all.

And, review the whole picture, not just retirement: tell clients if they have too much debt or if they’re living beyond their means.

No doctor wants to tell a patient he’s overweight and needs to diet, just as no advisor wants to tell a client she spends too much and needs to cut back. But that’s what why they hire us.

Read: Clients hate volatility? Here’s help

The days of simply managing a portfolio are far behind us. Clients are demanding all-encompassing service.

Robert Abboud, CFP, PFP, is the co-founder of AdvisorPractice.com, which offers advisors practical solutions to help transition to a financial planning practice and offers a 12 week training program. He is also the author of ‘No Regrets, A Common Sense Guide to Achieving and Affording Your Life Goals’. He has been offering life goals financial plans for over 15 years through his firm Wealth Strategies. Robert is available to speak at conferences and educational days. You can contact him at rob@wealthstrategies.com.

Robert Abboud