The mind is like a parachute – it doesn’t work if it’s not open.
~Frank Zappa.
That simple realization couldn’t be more relevant, especially when it comes to recognizing opportunities both in clients’ everyday routines and investment goals. Managing finances can be stressful for clients, especially given the record-high debt loads carried by many Canadians. But taking control doesn’t have to be nerve-wracking. It’s about having an open mind and getting into good habits. Just like adopting a new nutrition plan or starting an exercise regime, consistency is the key.
If you’re looking for more resources to help clients build consistency and develop good investment habits, think about harnessing the Power of the Bright Side. It can help you and your clients chart a course toward financial well-being. You can show them how staying calm and healthy in the face of adversity, avoiding fear-based decisions, setting realistic goals and seeking trusted advice will pay off in the long term.
Here are four tips for a healthy mind and portfolio:
1) Be cool
Keep emotions out of investing. One of the biggest stresses a client may have is the uncertainty in their own financial situation. That fear of the unknown can turn into anxiety when they face market swings. Staying calm, cool and collected can have a positive impact on clients’ investments. A good way to ease anxieties is to replace emotion with facts. Urge clients to sit down and chat with you about a definitive financial strategy tailored to their needs.
2) Set goals
Goal setting is an important driver of a client’s success in achieving a healthy portfolio. Start by asking why the goal is significant. Assigning a personal relevance to the goal will motivate clients. If a goal is too big, it can be difficult to realize. Instead, break goals down into smaller pieces or steps along with specific actions clients can take to keep moving forward.
Perfectionism and fear of failure can hinder progress. Clients are more likely to be confident in their goals if they give themselves the freedom to be positive and focus on what they can control. And just like New Year’s resolutions, goals tend to fade over time. It’s a good idea to keep goals visible and accessible for regular review.
3) Keep an open mind
Inspire clients to be endlessly curious. Learning never stops. Exposing themselves to new ideas, world views, cultures and ways of thinking can actually help clients with their financial goals down the road.
If clients get frustrated with market swings, encourage them to ask if the challenge is a serious obstacle or rather an inconvenience. Recognizing the level of the stressor helps to reframe the situation and gets clients to refocus on their main objectives. It’s better to take a look at the bigger, long-term picture.
Understanding the cost of cash is another concept to keep in mind. It’s difficult to imagine that having too much cash could be a bad thing. But when it comes to clients’ portfolios, having too much allocated to cash-like investments can inhibit long-term financial goals.
4) Get advice
No one can be an expert in every aspect of life – that’s why we need doctors, mechanics, builders and financial advisors. The value of your trusted advice gives clients clarity and focus so they can filter through the abundance of information that comes their way. Whether they’re buying a home, getting ready for retirement or thinking about how to adopt to new lifestyle or career changes, you can help clients create a savings plan that suits their individual needs. Often, a qualified, outside perspective is just what clients need to get started. Their success depends on how well they can focus on their financial plan. Your guidance can play a major role in keeping it on track.
The value of a trusted advisor can mean the difference between reaching financial goals and letting inaction or fear hold clients back from making prudent decisions. Encourage your clients to welcome new ideas, set realistic goals and keep emotions out of investing. It’s the key to a healthy mind and portfolio. And arguably, the single most important strategy investors need to remember is to stay invested.
This RRSP season, put the Power of the Bright Side to work for your investors. Remember to remind clients of the March 1, 2017 deadline. The contribution limit is 18% of the previous year’s income up to a maximum of $25,370.
Click here to contact your Sun Life sales director.
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