Communication And Support For Clients In Turbulent Times
By Ted R. Ridlehuber Cannon Financial Institute, Athens, GA
With the terroristse attacks on September 11, the resulting human tragedy in New York, Washington and Pennsylvania, and the volatile market we are experiencing, there has never been a time when communication with our clients is as important as now. It is necessary to have an organized plan to assure effective communication with clients and to assist them in this environment.
Each Relationship Manager should identify 10 or more clients to telephone for arranging a timely appointment with the client. The Relationship Manager should explain to the client that it is important to meet and discuss three things:
1. The current strength of the Relationship Manageres firm and answer any questions the client has about the firm.
2. The firmes position statement on the market and the long-term viability of the U.S. economy.
3. The firmes commitment and the Relationship Manageres personal commitment to the client evidenced by the desire of the Relationship Manager to discuss any issues the client has in the current environment.
At the meeting with the client the Relationship Manager should frame the three topics to be discussed and request that the client suggest any additional topics of concern. Discussing with the client, first, the recent attack and human tragedy will create a closer bond between the Relationship Manager and client. This is also a very good time for the Relationship Manager to discuss the current status and strength of the firm.
Second, it is important to discuss the firmes position statement on the current market conditions and the long-term viability of the U.S. economy. This subject creates an excellent opportunity to answer questions the client has about his or her relationship with the firm.
Third, communicate the firmes commitment to the client and a personal commitment to the client evidenced by asking the client at this time to share any issues the client has. The Relationship Manager should address questions to the client concerning:
1. Investment Issues
A. Asset Allocation issues based on the clientes current:
1) Income Expectations
2) Risk Tolerance
3) Time Horizons (time until retirement, education of children/descendents),
4) Constraints on companies, industries and countries or sections of the world,
5) Communication requirements in the immediate future,
6) Any liquidity needs in the near term.
B. Concentration Issues
C. Lack of an Overall Financial Advisor Issues
2. Insurance Issues
A. Life Insurance
2) Appropriateness of Types of Policies
3) Cost Effectiveness
2) Appropriateness of Types of Policies and Definitions of Disability
3) Cost Effectiveness
C. Long Term Care
D. Liability Insurance Coverage
3. Retirement Planning Issues
A. Investment Issues within the Retirement Plan
B. Distribution Plan at Retirement
4. Business Succession Plan Issues
A. The Lack of a Plan Issues
B. Estate and Gift Taxation Issues if Owner Desires to Transfer Business during Life or at Death to Children or Descendents
C. Capital Gains Tax Issues if Owner Desires to Sell Business
5. Who client has appointed as Durable Power of Attorney or Successor Trustee of a Self Trusteed Revocable
A. Lack of an Incapacity Plan Issues
B. An Inappropriate Party Named Issues
6. Gifting to Children and Descendents Issues
7. Charitable Gifting Issues
A. Taxation Issues
B. Issues dealing with the lack of a pool of funds to be kept intact (Donor Advised Fund, Private Foundation or Charitable Trust) to meet future changing cause needs.
8. Who has been named as clientes executor/trustee?
A. Inappropriate Party Named Issues
B. Lack of a Plan Issues
9. Distribution Plan to Spouse, Descendents and Others Issues
10. Charitable Inclinations at Death Issues
B. Control (Lack of a pool of funds to be kept intact to allow family/descendents to meet changing cause needs in the future.)
These 10 potential issues are extremely relevant for individuals to have in this turbulent environment. The investments issues occur because of the individuales feelings and needs changing as well as the current volatile market. An investment portfolio that was appropriate in August may not be appropriate today.
Many individuals are currently examining their present insurance policies. You can help your clients in this endeavor. Some clients are reconsidering the time of their retirement in this environment perhaps sooner than they had previously thought. Do not be surprised when individuals say that they want to go ahead and enjoy what they have worked for. Business owners are much more inclined now to want to discuss their business succession plan. Your help in this process is valuable to your clients.
Now, in this environment, many individuals are much more receptive to discussing gifting to children and descendents ideas, both for education expenses and for living expenses for their adult children. Both taxation issues and control issues are important to these clients. In addition to these gifting ideas, clients are more interested than ever, based on what Americans have done recently in aiding victims, victimse families, firemenes funds and police funds, in charitable gifting ideas. Discussing tax advantaged gifting ideas and pools of funds kept intact ideas (Donor Advised Funds, Private Foundations and Charitable Trusts to meet future changing cause needs) are very timely issues to your clients.
Finally, clients are now more interested in discussing their distribution of wealth at death issues than at anytime previously. The clientes wishes as to who should be executor/trustee, the plan to distribute to spouse, descendents and others in the most tax efficient way and whether control over these distributed assets is important to the client should be reviewed. This may make QTIP Trusts, Special Needs Trusts, Spendthrift Trusts and other generation skipping trusts appropriate now.
You have an opportunity to create more comfort in your client relationships by discussing the strength of your institution and your firmes position statement on the market and viability of the U.S. economy long-term. You also have an opportunity to discover issues that are important to your clients in this environment and offer ideas, suggestions and alternatives to address these issues. Occasionally institution decision makers have commented that they do not want their clients to perceive that the firm is trying to capitalize on a tragic time to sell to clients. What is the alternative? Your institution must let clients know you are there to keep them informed and help them with their issues unique in this environment.
Also, this environment offers an opportunity to rekindle interest with individuals and institutions that in the past decided not to do business with the firm or put off the decision to do business with it. Each appropriate person in the institution should identify several of these prospects, telephone them and ask for a face to face meeting to discuss these three very important items:
1. The present environment we find ourselves in and the strength of our firm,
2. Our firmes position statement on the market and long term viability of the U.S. economy, and
3. Our firmes commitment to you and my personal commitment to you evidenced by my desire to again discuss your situation and any current issues you have which we can address for you.
This an opportunity to help individuals, institutions, foundations and other entities that in this environment have different and unique issues that previously did not exist. Your institution should have an organized plan to identify these prospects and implement a plan to meet face to face with them.
The third strategy the firm should adopt in this environment is for each appropriate person in the institution to identify several professional advocates in the market who have previously initially introduced your firm to current clients, telephone them for face to face appointments to discuss the three things we have previously pointed out to discuss with current
clients and prospects:
1. The environment and the strength of our firm,
2. Our firmes position statement on the market and long term outlook for the U.S. economy, and
3. Our firmes commitment to you and your clients both during this unusual time in our history and in the future.
At these face to face meetings, the professional advocate should be asked towards the end of the meeting, for the names of clients who have issues to be addressed and if they would be comfortable introducing us. You will discover through this strategy that there are individuals, institutions and foundations that have unique issues now which will result in introductions you will get.
With a focused and disciplined plan your firm has the opportunity of providing added value to your clients during these current times, creating more client loyalty than ever before. Prospects will see more value in your firm than before and professional advocates will be more comfortable referring prospective clients to you because of the initiatives being implemented by your firm.ee
Ted R. Ridlehuber is President & CEO of Cannon Financial Institute. Cannones educational and consulting practices focus on developing the technical and sales skills of financial services professionals throughout the world. Mr. Ridlehuber, a graduate of the University of Georgiaes Law School, also serves as Chairman of the Marketing and Sales Committee of Trusts & Estates. Mr. Ridlehuber may be reached at [email protected]