Make Game Plans

Make Game Plans

In a normal world a financial plan is, usually, the plan that is going to be followed. But in a fast-changing world, like the one we are living through now, a more flexible and nimble approach may be required. The ‘A’ plan might need to be backed up by contingency plans B and C.

What will we do if the client loses a job that was, until now, considered safe?

What will we do if a business that has made a client financially comfortable suddenly goes bust, because the government has shut it down?

What will we do if dividend income stops, or investment losses have been severe?

What will we do if an investment or fund is frozen for redemptions?

What will we do if families that had downsized are suddenly supporting adult children?

These threats are all very real for many clients, and impossible to predict. We know from previous recessions that the effects can take time to be felt — we can expect turmoil and fallout to continue for months, or even years. A client who was okay yesterday, could wake to find themselves in very different circumstances tomorrow.

Reviewing suitability is the right response to all these scenarios. There is no formulaic response to any of these questions, because each set of circumstances is unique to each client.

The suitability review needs to start with those client circumstances:

  • Are their goals still the same, and with the same priorities?
  • What changes to income and, assets or employment have occurred?
  • What other resources are available to draw on?
  • Can drawdowns be delayed, or brought forward?
  • What options do they have available to work with, such as retiring earlier or later?

It’s getting to know the client all over again, as their lives could now be quite different to the last time you had these discussions. So, how prepared are you going to be for those discussions?

The client will, quite rightly, expect their advisor to have at least contemplated what is involved in these common shocks and what responses are possible. They won’t expect you to have an instant answer — but they probably will expect you to have a broad understanding of what strategies could be suitable for them now. Clients may experience discomfort if they sense that you, like them, have no idea what to do now.

SuitabilityPro™: Next generation risk profiling, financial planning, investment policy and suitability tracking. Visit our trial page to sign-up for a free 30-day trial of SuitabilityPro™.

I have been using FinaMetrica for over 17 years for onboarding new clients. They like the extensive value of the reports; but what we appreciate is the innovations in technology, the value of the client-facing materials and the development of the life-long client relationships as I get to really know their behavioral tendencies. FinaMetrica has assisted me in building a very successful practice and we highly recommend it for any advisor who wants to enhance the overall value of their client relationships.

Ron Wilkinson - Portland, Oregon, USA
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