May 2020 Client Journal

May 2020 Client Journal

‘Stay invested – stay with the plan’ is a common reassurance that advisors give their clients during market turmoil, like that which has flowed from the coronavirus crisis. But is it the right advice to be giving today? Is the ‘plan’ you suggest they stick with still suitable for them?

Suitability is highly individual, so there is no blanket ‘right or wrong’ answers. It all comes down to each client’s goals, financial capabilities, and risk capacity. And, as we explain this month, their investments.

Last month we explained that a client’s risk tolerance is unlikely to have changed, even though their risk capacity might be very different – for example through job loss or investment losses. In that update we also described how to use the FinaMetrica risk and return guides to help clients better understand market movements like these.

This month, we turn to the suitability of the investments clients hold. Because ‘knowing the product’ is as important as knowing the client — and we are finding out that some investment products are not what we thought them to be.

Helping Advisors Deliver More Value, More Efficiently

A letter from Mike Barad, Head of Financial Planning Software, Morningstar

At Morningstar, we believe the advice industry is evolving from being product-centric to goal-focused, with the best interests of investors at the center, and financial planning will become even more central to what successful advisors do. This is why, in April, we announced the acquisition of PlanPlus Global as a step to expand our financial-planning capabilities for advisors around the globe.

Read more here

Try Our SuitabilityPro 30-day Complimentary Trial

PlanPlus Global’s SuitabilityPro™ platform integrates FinaMetrica’s risk tolerance profiling tools with PlanPlus’ enhanced financial planning and portfolio tracking capabilities to enable financial advisors and enterprises to deliver and monitor the highest standard of advice to clients through the world’s most rigorous, academically validated and market-proven suitability technology.

Read more here

Review Investments For Suitability

What is the true risk profile of that investment? Has it done what you expected during the current crisis? Or has it delivered a shock? Those nasty surprises have been popping up around the world and require that advisors get to ‘know the product’ as it stands in the new light. It might no longer be suitable for the clients invested in it.

Read more here

Beware of Illiquidity Traps

Illiquidity is like an iceberg — the biggest threat is often hidden. But a worrying number of assets are being exposed as having liquidity problems. Some have been frozen, but that is not the only trap to watch out for. Perhaps the bigger danger are the investments that are still active but selling-down their A-grade assets in order to meet redemptions.

Read more here

Make Game Plans

In a normal world you can safely assume that next week, next month and next year will broadly resemble today, with the inevitable gyrations that life delivers. But we no longer live in that normal world. Things are changing at a speed we’ve never seen before and you need to have a plan in mind for events that might previously been unimaginable.

Read more here

How to Manage Client Conversations During Turbulent Markets

As the market pendulum continues to swing back and forth, many investors may be struggling to rein in their emotions. During these troubling times, financial advisors can use behavioral coaching tactics to help their clients manage their emotions and avoid making rash decisions.

Read more here

Training Sessions & Webinars

SuitabilityPro™ Training Sessions are hosted every Tuesday and Thursday from 1pm

  • Profiler: Getting Started! – Tuesday @ 1PM EST
  • ProPlanner: Getting Started! – Thursday @ 1PM EST

Register Here

FinaMetrica Webinars – Making the Most of FinaMetrica

FinaMetrica is a very powerful tool for advisors, that goes far beyond the risk tolerance test. This webinar explains how risk tolerance relates to investment decisions and guides you on using this information to have critically important conversations with clients.

  • Tuesday May 26th, 10:00 AM in Eastern Time (US and Canada), 3:00 PM in United Kingdom | Register Here
  • Friday May 29th, 10:00 AM in AEST (Australia and New Zealand) | Register Here

PlanPlus Learning Circle

PlanPlus Learning Circle is a live training community designed to inform and educate financial professionals of recent developments of interest in financial planning and getting the most out of our financial software tools. These are mini learning sessions that run approximately 30 minutes bi-weekly. Click the link for additional information.

Register Here

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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