Exceed Your Clients' Expectations as a Chartered Financial Consultant®

Successful financial advisors have mastered the fine art of balancing unique expectations across a diverse client base. The larger your client portfolio, the more personalities and idiosyncrasies, and that means you’re likely dealing with a broad spectrum of opinions, needs and demands about investments, risk tolerance, life and even your advising style.

 
Managing those expectations, whether focused on advisor communication, portfolio performance, or market conditions, may prove challenging. Earning a financial planning designation like the Chartered Financial Consultant® (ChFC®) deepens your comprehensive knowledge across both fundamental and more sophisticated planning areas, while equipping you with the skills to manage the often delicate dynamic of client expectations. While every client is different, there are certain factors that are generally exhibited, and internalizing these prevalent demands will help you build a stronger practice. Here are four client expectations that the ChFC® can help you successfully address.

1.  Be Available and Accessible...Instantly

Traditionally, financial advisors set an appointment with clients and met at their homes or the office to discuss finances. This scenario is less popular among modern clients, especially Millennials, who want to have access to you at a moment’s notice. Should they have a concern about finances based on a market report or news story, customers want to be able to reach you and in a variety of ways. Be available by mobile or office phone, social media, Skype, or even instant message so your clients can immediately access you when they have a concern, question, or idea. Not only will “instant” accessibility help you build trust, it can be the catalyst for an opportunity to grow that account and relationship.

With an emphasis on communication technique, the right financial planning courses provide a better understanding of the new way financial advisors must adapt and compete in today’s electronic-driven world. The ChFC® designation reflects the most modern communication trends, offering courses through streaming video, online lectures, and downloadable e-books to the smartphone or tablet.  

2. Empathetically Validate and Relate 

Your clients have chosen to invest with you rather than through a robo-advisor or online platform like Scottrade for many reasons, but likely because they see value in a personal, human relationship. You can provide perspective and advice in ways much different and deeper than less personal investment channels; by choosing you, your clients have implied their expectation for a personal approach. Part of this means acknowledging and validating an investor’s fear and concerns as an important part of client communications. Investopedia notes "Advisors need to be able to relate to their clients on an emotional level in order to maintain a working relationship." Explain "the emotional ramifications of an investment or planning decision" rather than immediately addressing the monetary implications. Without adequately addressing the personal element of investing and financial planning, clients may not develop a comfort level deep enough to accept important recommendations. Think about how fear or anxiety could compel a client to sell a stock position dangerously low or request to a too-high risk allocation based on a hunch.

Between September and October 2008, investors ripped $104 billion out of stock funds. Understandably, investors were scared. And while those investors missed the 36 percent downturn in 2008, they also missed the tremendous 26 percent swing back in 2009 and three more years of positive returns after that. Talking through the fear and panic with a trusted advisor wouldn’t have changed some investors’ minds, but it certainly would have helped some stay the course and enjoy four years of positive market performance. With a curriculum that covers behavioral finance, the ChFC® teaches you how to provide advisement to clients spanning an array of demographics, backgrounds, risk tolerance and personal circumstance, resulting in you becoming the most capable financial planner, ready to serve every person and every need.

3. Educate and Manage Performance Expectations

Because emotions can play such a large part in financial decisions, managing client expectations about returns and performance can be the difference in building trusting, long term relationships and churning scared or dissatisfied clients. Clients will always want to see the value of their portfolio growing, and rightfully so. As an expert, you know that periods of market volatility or emotionally driven investment decisions can temporarily or even permanently derail a financial plan, so it’s your responsibility to set proper expectations about performance at the onset of a relationship. Educating clients about staying the course, making long-term plays, avoiding emotional decision making and digesting media coverage with a grain of salt will help them understand what they should and shouldn’t expect from their investment mix and financial strategy. Without you to help them manage such expectations, your clients may become disenchanted or even angry when their account balance dips below original investment levels or portfolio highs. They may blame you or distrust you after seeing negative returns in a given year. Unlike you, most investors don’t have an adequate understanding of the market and long term financial planning strategies and this lack of education can wreak havoc on even the most reputable advisor. One way you can facilitate expectations is by setting short- and long-term goals so clients realize how well their portfolio has been managed in meeting their established financial goals. While setting and managing portfolio performance expectations may be one of the most frustrating parts of your financial career, it’s also one of the most important.  

The ChFC® concentrates on time-value-of-money concepts, risk analyses, and risk/return computation to better prepare you for educating clients and ultimately managing their emotions, expectations, and corresponding actions.

4. Customize Advice for Unique Generational Needs

Clients from various generations have very varying expectations for their finances. Millennials, for instance, have been documented as living in the moment and perceiving financial stability as "paying the bills and other day-to-day obligations." Generation X is characterized by wanting enough money to live securely in comfort without looking over their shoulders for the next big market crash. And boomers moving towards retirement are increasingly concerned about having sufficient money to live comfortably without the safety net of employment income. While some investment trends and fundamental approaches to financial planning can be applied across generations, portfolio customization advice that addresses both generational and psychographic nuances is a required capability of successful advisors. The plan you create for a 34-year-old doctor who just landed his first job after 10 years of medical school and $300k of student loan debt will undoubtedly be different than the plan you build for a 54 year old projected to retire at 63 and $1.5 million in retirement savings.  

The ChFC® designation provides advisors with an excellent opportunity to better understand the psychology behind diverse generational demographics and behaviors, making it easier for you to prospect and advise clients of any age.  

As a ChFC®, you’ll be equipped to uncover and discover more about your clients’ needs and expectations, and feel confident in your mastery of key financial planning disciplines that address the requirements of clients spanning generations from millennials to boomers. Learn more about this professional designation by reading the ChFC® infomation sheet.