Advanced Planning Checklist: Are You Doing These 4 Things?

At its core, advanced planning is all about deploying a range of expertise to address clients’ financial needs beyond investment management. Done well, it can help build trusted, long-term relationships that may lead to additional assets under management and introductions to qualified prospective clients. For many investors, there’s a gap in these services.

Among investors with between $5 million and $10 million in investable assets, nearly half (44.5%) report not getting help with their entire financial pictures.¹ Even among those with the highest levels of investable assets, $10 million to $25 million, one-third (35.2%) work with advisors who only offer investment management.¹ This is a huge missed opportunity to grow your business organically by delivering the range of services the affluent may want and need.

When it comes to advanced planning, two areas of focus to consider are tax mitigation and estate planning.

1. Tax Mitigation

Reducing taxes is a crucial concern for many wealthy households, with 78.2% of investors expressing some or significant interest in discovering ways to minimize their taxes.¹ However, only 41.6% of investors currently receive this advice, presenting an opportunity for advisors who have ready access to tax experts to assist their clients.¹

2. Estate Planning

High-net-worth investors often already have estate plans in place – but those plans may need to be reviewed and updated. In fact, half of investors with $5 million to $9.9 million in investable assets have experienced changes in their lives or level of wealth since their plans were created.¹ Among those with $10 million to $25 million, more than three-quarters have experienced changes that may require updating their estate plans.¹

Four simple steps can help you build and maintain a robust advanced planning practice.

1. Assemble a network.

A great many advanced planning solutions can be implemented with the help of an accountant and an estate planning attorney, but depending on the level of sophistication of your clients’ financial issues, you may also need to enlist experts in life insurance, personal lines insurance, and asset protection, among other areas. Determine which contacts you’ll require to help support your clients and reach out to them.

2. Understand your clients’ needs.

The better your knowledge of each client’s financial and personal life, the more on-target the recommendations in these plans will be. Make sure you have a program in place to stay in touch with clients, learn about their lives, and keep up with their goals outside of the routine interactions you have related to their investments.

3. Prioritize accordingly.

Don’t overwhelm your clients with all the potential decisions they could face. Instead, focus on the areas of highest concern. Then guide them in taking one of three actions for each recommendation: Do it (implement the recommendation), drop it (do not implement the recommendation), or defer it (consider the recommendation again at a later time).

Then, discuss and determine with clients the order in which the “do it” recommendations should be implemented – and why.

4. Stay current.

Take advantage of every appropriate professional development opportunity to stay informed about the latest financial products, strategies, and regulatory changes. You owe it to your clients to provide the most accurate and up-to-date advice.

Expanding your services to include advanced planning solutions may be one of the most powerful actions you can take to better serve your clients and enhance your value proposition to help attract and retain wealthier clients. What’s your plan?

Important Information

Source:

1. CEG Insights, “Play to Win: Propel Your Success by Helping Your Clients Weather Today’s Financial Storm.”

The views expressed herein may not be reflective of current opinions, are subject to change without prior notice, and should not be considered investment advice.

This information has been created by Harbor Capital Advisors for Financial Professionals. It’s important to consult directly with your firm’s compliance department to obtain precise advice based on their policies, procedures, and any industry-specific regulations.

Methodology:

These survey results come from CEG Insights, “Propel Your Success by Helping Your Clients Weather Today’s Financial Storm.” The data in this report was gathered during an online survey of 1,237 investors conducted by CEG Insights in February 2023. Each respondent had a net worth, excluding primary residences, of between $100,000 and $25 million. Each was either the sole or joint financial decision-maker in their household.