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The Power of Thoughtful Financial Advice During Key Life Events

Proactive engagement reflects a commitment to comprehensive financial wellness, creating a meaningful and long-lasting impact on clients’ lives.

Financial advisors play a vital role in guiding individual clients and their families through the complex landscape of personal finance. Their responsibilities increasingly extend beyond investment management, as they embrace their role as fiduciaries committed to their clients' best interests. Recognizing that life is a series of significant milestones brimming with wealth management risks and opportunities, these advisors proactively navigate their clients through these crucial life events, creating real value while fostering trust and goodwill. In this article, we will explore three essential life events that represent approximately 20 million advice opportunities, enabling financial advisors to showcase their expertise beyond traditional investment strategies.

Buying or Selling a Home: 12 Million Opportunities for Value-Added Advice

The real estate market in the United States sees approximately 6 million home transactions each year, encompassing both buyers and sellers. As individuals embark on what may be the most substantial financial transaction of their lives, financial advisors can provide invaluable guidance beyond the realms of investing. For homebuyers, this includes considerations such as total cost of ownership, financing options, insurance, titling and tax implications. On the other side, sellers benefit from advice on maximizing sale proceeds, managing tax implications and updating financial and estate plans. By offering support during this pivotal life event, financial advisors can genuinely add quantifiable value for their clients while building trust and goodwill at the same time. 

Reaching Legal Adulthood: 4 Million Opportunities for Personalized Advice

According to the Centers for Disease Control and Prevention, over 4 million Americans will reach the age of 18 in 2023. As these individuals attain legal adulthood in most states (19 in Nebraska and Alabama), they encounter a range of considerations that client-centric advisors address when working with their families. This includes executing an advance directive for healthcare, empowering parents or trusted contacts to make crucial decisions in case of health issues. Additionally, should the need arise, setting up a financial power of attorney allows for trusted individuals to manage financial matters effectively. Ensuring important documents like birth certificates and Social Security cards are in order, and guiding males to register for the Selective Service System, are also vital aspects of comprehensive advice during this life event. By offering proactive advice during this transition to adulthood, financial advisors can demonstrate their commitment to holistic financial well-being and nurture lifelong relationships with their client’s family.

Reaching Age 62 and Social Security Benefits: 4 Million Opportunities for Impactful Advice

The CDC predicts that over 4 million Americans will turn 62 in 2023, making many eligible to file for Social Security benefits. Caring financial advisors understand the significance of getting the filing timing right—while workers can start receiving benefits at age 62, their monthly benefits increase if they wait until later (up to age 70). Factors such as current income needs, life expectancy and other considerations play a crucial role in determining the best course of action. Surprisingly, a recent study suggests that more than 90% of workers would be better off filing later, but a mere 10% actually do so, leaving real money on the table. The median foregone lifetime benefits amount to an astonishing $182,000. By providing informed advice on Social Security filing, financial advisors can help their clients maximize their lifetime benefits, reinforcing their value proposition and strengthening client relationships.

Building Bridges, Delivering Value

Caring financial advisors who embrace the role of fiduciaries can elevate their value proposition by providing comprehensive advice during dozens of significant life events. Whether it's guiding clients through the intricacies of buying or selling a home, assisting individuals as they enter legal adulthood or offering optimal strategies for Social Security benefits, financial advisors can create quantifiable value while nurturing trust and goodwill. Advisors who take the initiative to connect with clients during key life events establish themselves as invaluable partners. Their proactive engagement reflects a commitment to comprehensive financial wellness, creating a meaningful and long-lasting impact on the lives of those they serve.

Philipp Hecker is chief executive officer of Bento Engine.

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