Editor’s Note: A number of recent studies clearly demonstrate the importance of the work done by “face-to-face” financial advisors, in terms of the success and results of the account balances in 403(b) and 457 plans. We are told in those studies that the face-to-face service not only increases the amount contributed in these plans, it results in a better investment result. In this article, Kent Schutte provides some great insights on the activities that contribute to these results. The article originally appeared in the November/December issue of "Market Beat," published by the National Tax Sheltered Accounts Association (NTSAA), the nation's only independent, non-profit association dedicated to the 403(b) and 457 markets.
By Kent Schutte
I recently asked several successful advisors to recall an experience where a client commented or complimented them on how they had helped a client. It was interesting that there were no responses relative to managing the client’s 403(b) or other retirement accounts, but rather other aspects of financial management.
The comments that advisors heard from clients were along the lines of, “You helped me ...”
• Understand my DB plan so I could determine if I could retire.
• Decide whether I should refinance my home or make a large purchase.
• Understand our Social Security options and when we should start to draw.
• Understand my employer benefits offered through my employment contract.
• Understand I would be better off to work a couple more years even though I didn’t like the answer.
Other great comments we all would like to hear included:
• Don’t ever retire, I trust you more than my doctor.
• Do we really have to meet? You have worked with me for several years, just email your recommendations because I trust your judgment.
• Until reviewing the summary of our meeting you sent me, I had no idea how many financial areas you helped me with.
I also thought it would be valuable to compile a list of comments an advisor would not want a client to say about them. These are comments clients have told us as to why they were leaving their previous advisor. The list included:
• They never call me back.
• They told me they didn’t know how my DB plan worked but they think it’s pretty good.
• They told me they can’t make recommendations to my portfolio because if they knew that, they would be a millionaire.
• They don’t know anything about my employer benefits.
• If I want a loan or hardship withdrawal, I need to call the home office.
As 403(b) specialists and advisors, it will always be valuable to know details about the 403(b) marketplace, investment options and pertinent economic data. However, to me, it is fairly clear to see what successful advisors do and, equally important, what they don’t do. They take the time and energy to understand several aspects about the prospective clients financial life, and build a more complete and comprehensive financial service. They ask a lot of questions of their clients and become very good listeners.
If you have not done so, do yourself and prospective clients a favor and learn about their DB plan and employment contract provisions, and gain a clear understanding of Social Security benefits. Basically become their “go-to person” when it comes to financial questions.
If you do this, I’m convinced you will build a very successful practice that will also generate practically limitless referrals.
Kent Schutte, CFP, TGPC, ChFC, CLU is the president of EFS Advisors in Cambridge, MN.
Copyright © 2012 National Tax Sheltered Accounts Association. Used by permission. This information is not to be considered as tax advice. In publishing this material, the NTSAA is not rendering legal, tax, accounting or other professional advice. If legal or other expert assistance is required, please consult the services of an appropriate professional.
