How to Create a Systematized Planning Process

Transcription

1 Session 4: How to Get Started and Practical Approach to Client Meetings Deborah Fox 1

2 How to Get Started with Adding PFP Services to Your Practice Presented by Deborah Fox Founder, Fox Financial Planning Network

3 Speaker Biography Deborah Fox has been a practicing financial planner for 30 years and is founder of Fox Financial Planning Network. Deborah is nationally known for her unique planning processes and for instructing and consulting tax professionals and financial advisors on how to set up a holistic pfp practice to work efficiently and increase revenues, all while delivering a higher level of client services. Deborah resides in San Diego, CA and is regularly sought out for national media interviews and speaking engagements.

4 Begin With the End in Mind. The Seven Habits of Highly Effective People by Steven Covey How Can You Succeed? Plan ahead and avoid the mistakes most advisors make.

5 American Institute of CPAs Copyright Fox Financial Planning Network 2014

6 American Institute of CPAs Copyright Fox Financial Planning Network 2014

7 Creating Your Business Model Will You Offer Financial Planning or Wealth Management Services?

8 Potential Areas of Advice Spending Plan Insurance Investments Readiness to Retire Retirement Estate Planning Charitable Giving Medicare Social Security Business Planning

9 Creating Your Business Model Will you offer advice in-house or will you outsource by partnering with another advisory firm and share revenues? Who in your firm will offer the advice? If you will personally provide advice in particular planning areas, which ones? How will you register? Registered Representative, RIA or IAR? Who will handle compliance?

10 Creating Your Business Model How will you charge for your services? Who is your ideal client (middle income, affluent, business owners, executives, personality, specialty area, NexGen, etc)? How many of these client relationships do you want? How will you position yourself in the marketplace? Under what name and business entity will you do business?

11 Creating Your Business Model Will you offer advice in-house or will you outsource by partnering with another advisory firm and share revenues? For in-house, will it be a solo advisor, ensemble firm operating out of one office, multiple advisors in multiple offices or a designated team providing advice (such as a central financial planning department)? For outsourcing, will you partner with another CPA firm or another type of advisory firm that doesn t provide tax advice? (Or do you want to stop preparing tax returns?)

12 Creating Your Business Model If you will personally provide advice in particular planning areas, which ones? One or two? Most areas? Or will you just be the overseer? Who will be part of your team of professionals?

13 Creating Your Business Model How will you register? RIA or IAR? Registered Representative with a Broker/Dealer? What are your state requirements? Registered Investment Advisor (RIA) Your own stand alone advisory firm Investment Advisor Representative (IAR) You are under someone else s RIA You can be an IAR under a Broker/Dealer if you choose a hybrid compensation model

14 Creating Your Business Model Who will handle compliance? VERY important! Relatively easy to handle if you set up proper compliance procedures initially Someone in the firm needs to be the designated compliance officer (that may be you to start!) Establish a relationship with a professional compliance professional that can help keep you up-to-date and compliant

15 Creating Your Business Model How will you charge for your services? Commission only or Fee-only Combination of commissions & fees Hourly Project-based Asset Under Management (AUM) fees Annual retainers

16 Creating Your Business Model Who is your ideal client (middle income, affluent, business owners, executives, personality, particular planning needs, etc)? Analyze your existing client base. Who do you enjoy working with the most? What are their common characteristics? What type of client would benefit most from the business model you would like to adopt? Who would appreciate and be able to afford your services?

17 Creating Your Business Model How many of these client relationships do you want? For integrated financial planning or wealth management services, one full-time advisor can effectively serve 50 to 100 clients (Much fewer for family office services.) This number can increase for hourly or project-based modular planning services.

18 Creating Your Business Model How will you position yourself in the marketplace? Holistic planning? One-time plan? Ongoing? Overseer of all areas of the client s finances? Planning on an as needed basis? What is your value proposition to your client?

19 Creating Your Business Model Under what name and business entity will you do business? Keep your tax practice and financial planning practice separate! (Important for compliance reasons.) Sole proprietorship, LLC or S- or C-Corp? Will your name be included in the name of the business? Think about succession plans.

20 Other Important Considerations Delegation of Duties Using technology to build in efficiencies to your practice Systematize the delivery of your client services (with the ability to personalize)

21 Other Important Considerations Delegation of Duties Get buy-in from all who will be involved Sell the dream (happier clients, higher revenues for the firm, systematized process, work satisfaction, etc.) Determine who does what Consider each individual s strengths and what type of tasks he/she likes to do

22 Other Important Considerations Using technology to build in efficiencies Use The Cloud Client Relationship Manager (CRM) Robust back-up system Financial planning software Document management system

23 Other Important Considerations Technology continued Portfolio management system Web-based application for collaboration (for joint case work, document storage, accessible 24/7) Forefield Advisor (Free to PFP Section members! $399 value!) Bob Veres Inside Information (Free to PFP Section members! $399 value!)

24 Create Your Own Starbucks Experience

25 Other Important Considerations Systematize your planning services Hugely important! You will have a train wreck if you do not create clear planning and service pathways that are not organized and standardized Create a Workflow System comprised of workflows, corresponding procedures, supporting checklists, templates and visual aids

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28 Insurance & Spending Planning Workflow 1. (Assistant) Check Client Documents Check to make sure the clients have provided all insurance and spending documents necessary for Planner and Paraplanner to prepare for the meeting. 2. (Paraplanner) Prepare Insurance Summary Spreadsheet Download all client insurance policies and build the insurance summary spreadsheet. Make sure to include any important notes about specific policies and any other information the planner should know when completing the review. 3. (Planner) Prepare Insurance Analysis Use the insurance summary spreadsheet, specific insurance policies and the insurance analysis template to prepare the clients insurance analysis. 4. (Planner) Discuss Insurance Analysis The Planner should establish a time with the Paraplanner to discuss and review the clients insurance needs. This ensures that both individuals are in agreement and understand what needs to be prepared for the client report.

29 Insurance & Spending Planning Workflow 5. (Paraplanner) Prepare Client Report Prepare an Insurance Needs Analysis in planning software using the company template. Choose the appropriate pages and diagrams to include based on the clients coverage needs and what the Planner would like to demonstrate. Insert the Planner s recommendations from the Insurance Analysis Report. 6. (Planner) Review Insurance Report Review the completed Insurance Report to make sure all information is correct and has been included. 7. (Planner) Analyze Clients Current Debt Complete a review of all debt the client owes. Decide if it would be appropriate to restructure, refinance, or pay off any particular debt while taking cash flow into consideration. Prepare any specific debt recommendations for the meeting. 8. (Assistant) Print Meeting Materials and Update Planner Print out all materials necessary for the meeting. This includes but is not limited to client exercises, visual aids, insurance & spending plan presentation materials and client agreements & disclosures. Update the Planner if there are any outstanding items or information the client needs to bring to the meeting.

30 (Planner) Procedure for Preparing for the Meeting 1. Download the PDF of the client s insurance policies and accompanying documents from client s folder in CRM. 2. Prepare a summary of insurance policies using the Insurance Summary Template. 3. Perform an Insurance Analysis for the client (either in-office or outsource). See the Insurance Analysis Checklist, Explanation of Insurance Policy Language and Outsourcing Insurance Review Procedure for how to complete the analysis. 4. Prepare Insurance Recommendations for the clients. See Insurance Policy Analysis Template for how to prepare this information. See Sample Insurance Analysis Report for an example of what is presented to clients. 5. Analyze clients debt mortgage, auto, student loans, any other installment debt, credit cards. Determine if it would be appropriate to restructure, refinance or pay down any particular debt. Interest rates, terms and cash flow should be taken into consideration. 6. Prepare specific debt recommendations for meeting.

31 PFP Section has a shortcut for you to get systematized. Pre-written workflows and procedures! You won t have to start from scratch Fully customize to how you want to do things Talk to us at the end of the session or at our booth at the PFP Conference

32 Attracting Clients Put your business plan in writing First tap your existing client base Create a script Elevator speech (one or two sentences) Initial conversation with a prospective client Meeting to describe your services

33 Attracting Clients Create a Schedule of Meetings Create descriptions of the financial planning issues you will address Create Engagement Standards Manage client expectations on the front end! Clarify what you expect from your client and what they should expect from you

34 Three Tasks To Get You Started First create your business in your mind and then in writing (incorporating all who would be involved) Put the infrastructure in place (people, compliance, technology, systems) Begin with a few existing clients you know well and with whom you have a good relationship

35 Next Session How to approach each area of planning Tips to create a systematized planning process by topic A planning methodology that works and that clients appreciate! How to become indispensible to your clients

36 A Practical Approach to Client Meetings Presented by Deborah Fox Founder, Fox Financial Planning Network

37 Agenda How to approach each area of planning Tips to create a systematized planning process by topic A planning methodology that works and that clients appreciate! How to become indispensible to your clients

38 Philosophy Standardize and systematize all of your client services. A few of the benefits: A glide path for the delivery of services and The ability to provide a superior client experience Compliance steps can be automatically built in A team can work smoothly & efficiently together

39 A Planning Methodology that Works Segmented, Yet Integrated Planning Both you AND your client succeed Easy to deliver Helps you build a deep relationship with your client Will set you apart

40 Planning Areas for Discussion Today Data gathering Investing Retirement Insurance Estate Planning Social Security Medicare Wrapping Up the Plan

41 Data Gathering

42 Data Gathering Finish engagement paperwork and collect fee first Create a checklist of documents needed with boxes client can check off ( included, working on, n/a ) Set document due date and first planning meeting Scan (or copy) any documents client brought to the prospective client meeting (if appropriate) Create a scanning procedure, standardized document-naming process and electronic storage place for all requested documents

43 Investment Planning

44 Investment Planning Conduct a high level portfolio review If you will manage the assets, begin the account transfer process Determine client s risk profile Conduct a more detailed portfolio review (or outsource the review)

45 Investing Planning continued Provide investment education to the client Create an Investment Policy Statement (IPS) Provide investment recommendations In-house management Outsource Conduct due diligence on financial advisors /investment strategists / Tamps

46 Investing Planning continued Finalize portfolio construction Complete account transfers (if applicable) Set up a portfolio monitoring procedure Discuss investment performance quarterly with financial advisor/investment strategist Discuss investment performance of accounts with client once per year

47 Investing Planning continued Provide client investment education (at least at a high level) Economic cycles Market emotions Market cycles (Secular & Cyclical Bull & Bear) Effect of Market Movement vs Modern Portfolio Theory on portfolio returns Importance of Diversification

48 Retirement Planning

49 Retirement Planning Discuss assumptions with client (rates of return, inflation rate, income desired, life expectancy, pensions, inheritances, expenses, etc.) Decide whether you will run a goals- or cash flow-based retirement analysis Discuss options if the plan fails (work longer, live on less income, work part-time, etc.) Run a scenario with a 25% (or more) portfolio decline early in retirement

50 Retirement Planning continued Monte Carlo Analysis Advisors can put too much emphasis on this analysis Explain to your client that this is only a tool and not a directive as to whether or not their plan will actually succeed or fail; It is merely one indicator Investigate the assumptions used in the Monte Carlo calculator you are using

51 Retirement Planning continued Determine the most efficient way to take distributions Determine how and from where taxes will be paid Set up a monitoring system for systematic withdrawals from an account (monitor holdings that are being tapped and cash level in account) Monitor spending pattern with aggregated account software

52 Retirement Planning continued Re-run retirement plan annually Take rising health care, travel & leisure costs and human capital into account Pre-determine with the client what actions will be taken if client doesn t follow their plan Discuss with your client the two serious Baby Boomer mistakes. They have: Over-consumed Under-saved

53 Insurance Planning

54 Contingency (Insurance) Planning Make sure you have the actual policies for the following lines of insurance: Auto Homeowners Umbrella Individual Life Individual Disability Group Health, Life, Disablilty, AD&D, Long Term Care, etc. Specialty (ransom, forest fire, body parts, etc.)

55 Contingency (Insurance) Planning Conduct an insurance analysis (or outsource) Analyze deductibles, items covered, exclusions, policy limits, legal language Provide recommendations after client discussion on: Coverage amounts Features Change in deductibles, limits, etc.

56 Contingency (Insurance) Planning Provide client education on the purpose and features of each line of insurance Help client shop around Ensure that policies are not leaving any coverage gaps (especially liability) Form professional alliances with individuals that are experts in the various lines of insurance

57 Contingency (Insurance) Planning Make sure client follows through with all policy changes or new coverage purchases Keep a copy of all current insurance policies Periodically review all policies in case updates become necessary Keep tabs on insurance company ratings and presence in the business

58 Estate Planning

59 Estate Planning Form a professional alliance with an estate planning attorney If client already has a written estate plan, arrange to have the estate planning attorney to perform a review. Analyze: Will / Trust Power of Attorneys Health Care Directives Type of Trust (if applicable) (Revocable, Irrevocable, Dynasty?) Estate Plan for Digital Assets

60 Estate Planning continued Check to see: How real property and checking/savings accounts are titled? How are investment accounts held? Who are named beneficiaries on retirement accounts? How is Safety Deposit Box titled? Are there blended family issues? Special Needs or potential spendthrift beneficiaries? Dynasty Trust considerations? Corps or LLCs? Charitable Trusts?

61 Estate Planning continued Collaborate with the estate planning attorney to perform any necessary tax analysis Provide client education on estate planning and the benefits of having a plan (beneficiary designations, wills, revocable vs. irrevocable trusts, probate, etc.) Present the estate planning attorney s estate plan analysis and recommendations Ensure client follows through with necessary changes or additions to their plan

62 Social Security & Medicare Planning

63 Social Security & Medicare Planning Most advisors don t go into any depth in these areas of planning Clients can greatly benefit from advice in these areas Client education is important because most people don t know about the planning opportunities in each of these planning areas

64 Social Security Timing of distributions can make tens of thousands of dollars difference to the level of benefits your clients receive Age of spouses, level of income, how long spouse will work, available pensions will all effect planning outcome Hot topic right now. You can use it to attract new clients, especially with new changes the Fed announced recently.

65 Medicare Your clients need to know the ins and outs of this system so they can choose the combination of benefits that best meets their needs (assistance with annual open enrollment is a value-added benefit) Again, client education is important here Frequency of benefit usage, amount of travel, medications, service delivery model need to be taken into consideration

66 Initial Plan Completion

67 Pulling It All Together Once all the action items have been assigned and completed, you will consolidate the plan and summarize what has been accomplished Present a full written financial plan in a nice binder at this point Celebrate your clients successes

68 Pulling It All Together Restate clients goals and objectives Demonstrate the progress that has been made up to this point Provide a copy of the work that has been prepared for each planning area Write a personal statement about your client and your experience working with them

69 Pulling It All Together Have the client communicate about the planning experience Now that the foundational plan has been put in place, explain that this is not the end, but the beginning Have the client identify a planning area they want to work on this coming year You also choose an area or two to work on

70 Pulling It All Together Provide the client with a gift to serve as a memorial to all the good planning work the client has completed Provide your client with three certificates for a friend or family member to receive a complimentary review Set the next appointment

71 Become Indispensible to Your Clients Oversee all areas of your clients finances Become a fiduciary for your client to look out for their best interests Become that objective professional that your clients know they can trust and get the truth from Become known in your community by other professionals as the one to go to for objective planning Consider adopting a niche Celebrate successes with your client so your impact stays top of mind

72 Become A Member! Complete Workflow System (customizable templates) with the supporting scripts, checklists, visual aids and more Modular video training on how to prepare for, deliver and follow up from each client meeting Resource Center with lots of practice management ideas New ideas from Deborah Fox each month via a live session We ll provide you with tools, templates and training to build a successful PFP practice, work more efficiently, increase your revenues, and deliver a higher level of client services.

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