Published by Taylor Financial Group
When do we usually hear from our clients with questions about their investments? Not when the markets are up and they’re doing well. Clients typically reach out when the markets are down, which is not the ideal time to make investment decisions.
We believe that a better approach is to meet with clients at least annually, and not just when things are going south. If you’re meeting and/or communicating with us regularly, chances are you are not going to be the person that panics when the markets aren’t cooperating.
During portfolio review meetings, we have the opportunity to discuss not just your investments and market conditions. We also get a chance to talk about your goals, your concerns, and your fears, all of which can change over time. Below, we discuss some of the most essential questions we answer during meetings.
Are your investments performing as expected?
A review of the strategy being used for each of your goals helps us plan how we move forward. This is also a great time to figure out if your investments are still aligned with your goals. We like to walk through a client’s assets and explain how they matched up to both their earnings goals and their risk profile, while figuring out if it all still makes sense. The risk satisfaction check-in is especially important because sometimes clients change their outlook on the amount of risk they hope their portfolio will bear. For instance, a young client may have decided to increase risk saving for retirement at one time, but then decide a more conservative plan is more appropriate once their first child is born.
Are you being efficient enough with tax savings?
Often, taxes can be a substantial drain on your overall investment holdings. According to Morningstar, on average, over the 88-year period ending in 2014, investors gave up from one to two percentage points of their annual returns to taxes. As a hypothetical example, a stock return of 10% that fell to 8% after taxes would, in effect, have left the investor with 2% less investment income in his or her pocket.
Unfortunately, we can’t control the outcomes of the markets or the tregulations put into place. However, we can plan around how to make distributions and allocate resources to maximize value. It’s what we do! Many times, during client meetings, we have discovered that clients have holdings being managed elsewhere, like a 401(k), IRA, or other account. These discoveries are important to us (and should be important to the client to share with us) because we are able to confirm that those accounts are being managed in a way that will help the client efficiently save on taxes. We can’t help you if we don’t know about it!
Have you considered strategies to protect and maximize your income?
Sure, sometimes we have clients who have inherited a large sum of money that they want to invest and grow. But, most of the time, our clients have earned their money through years of hard work and dedication. Either way, one thing is always true – clients want to protect their income. A good strategy to protect your money, and to make sure family and loved ones get to benefit from it too, is through life insurance policies. We always encourage our clients to consider life insurance policies, though the amounts may vary depending on family circumstances and goals. Once policies are in place, it’s even more important to regularly review the policies and make sure the amounts and beneficiaries are still appropriate. These are the types of items we cover during a client meeting because we realize clients are not inclined to ask these questions of themselves, and circumstances can significantly change even in a year’s time.
What steps can we take to preserve your assets?
Let’s be honest, hardly ever does a client come in wanting to spend a huge amount of time discussing their concerns about where they’ve been. That’s not to say that having discussions about what has already happened is not going to happen – it most certainly does! But the conversation often focuses on the future and where your money is going. To that end, we find it is important to go far beyond just a few years, or even into retirement. Having an estate plan in place is potentially most significant. During client meetings, we can have conversations with you to help you figure out what is most important and who is most important, and then set up a formal strategy to address estate planning items. Clients often do not realize how important certain decisions are to them until they consider the possibility of those decisions being made on their behalf if or when they are not capable of making decisions on their own. A simple conversation can be the biggest motivator and can light the fire a client needs to get the estate planning process rolling. Having regular client meetings helps us have these conversations.
Should we get the family involved?
One of the most vital things we’ve learned throughout the years is that our clients’ decisions don’t just affect them. The implications of the decisions you make can reach across generations. That’s part of the reason why we have often arranged meetings with clients’ parents and/or children, and even grandchildren. For some clients, these types of meetings may be to address expenses or planning related to aging parents who can no longer live on their own or manage their own financial or personal affairs. For others, it’s about supporting children who are in college or post-college as they transition into the “real world.” No matter the situation, sometimes it’s necessary to get the family involved and figure things out together.
There are many other questions that can (and do) come up during client meetings. We know that every client is different and has unique goals and needs. And we do everything we can to have the tough conversations, help make the difficult decisions, and prioritize individual and family goals across generations. Contact us today if you want to schedule a meeting to discuss anything at all.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advisory services offered through CWM, LLC a Registered Investment Advisor. LPL Financial is under separate ownership from any other named entity.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss. Investing involves risk including loss of principal. The hypothetical example provided is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.
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