Voices

How to Explain Your Value to Prospects

By Paula Vasan May 29, 2013, 4:46 p.m. EDT 3 Min Read

Value is often difficult to quantify. When it comes to your jobs, how do you measure your value and overall impact?

The answer via Twitter from Carl Richards, a financial planner and director of investor education at BAM Advisor Services, a community of more than 130 independent wealth management firms: help your clients avoid the most common mistakes.

Carl Richards@behaviorgap: Honest Question: what is the value of a good advisor? someone that helps you avoid one big mistake every few years?

Paula Vasan @paulavasan: @behaviorgap interesting question. Do you feel that's enough to make it worthwhile? How do you measure that?

Carl Richards @behaviorgap: @paulavasan worth it? Yes! How to measure it...that's the hard part!

Paula Vasan @paulavasan: @behaviorgap I like your enthusiasm! What are the most common mistakes in your view?

Carl Richards @behaviorgap: @paulavasan buying high and/selling low.

Paula Vasan @paulavasan: @behaviorgap To clarify, are you saying the primary value of advisors is helping clients avoid buying high, selling low? Other objectives?

Carl Richards @behaviorgap: @paulavasan I hired an advisor to 1- help me clarify my goals 2- remind me of my goals 3- stand between me and stupid

Here's what a handful of other financial planners had to say about how they quantify their value.

KEEP AN EYE ON OBJECTIVES

I think a good advisor is one whom can help their clients with personal issues related to their goals and objectives that keep them up all night. A good advisor will tell clients:Dont confuse someone else's opinion on what theyre doing as sound advice. It may be right for them and wrong for you (because of different goals, time horizons, etc.)Dont make decisions based on headliners -- read the book and not just the titleTake emotion out of the decision-making process

--Tony Lucas, Beverly Hills Wealth Management

AVOID THE MOST COMMON PITFALLS

A good advisor should help clients avoid mistakes not just every few years, but be on call to keep mistakes from happening completely. Some of the most common mistakes a good advisor will help clients avoid making each year:

Not having an income plan
Not having a tax plan for themselves and their estate
Taking too much risk for their age

--Bryan Slovon, Stuart Financial Group

BALANCE FEAR AND GREED

Its very important to help clients avoid big mistakes (in fact, all sized mistakes) as often as necessary. Pulling the plug in 2000, even after the March drop, saved clients from losing major percentages of their net worth. The same is true in 2008. The buildup to disaster was palpable both times despite rampant denial. The value of a good advisor is to balance clients' naturally occurring fear and greed. Folks want to make as much money as they can. They would prefer to never lose ANY money. Finding positive return within the pendulum swing is the essential challenge. So advisors should make sure clients:

Take solid profits while they still have them
Cut losses when they must or add to the position
Determine where there is money to be made and GO THERE. If youre not sure, go to cash.
Abide by the 3Ms: Maximize returns. Minimize losses. Manage risk. My clients need help with these three first. Then they utilize my business experience and training to help themselves navigate those risks.

--Joe Ellison, Beverly Hills Wealth Management

LEADERSHIP

I think the most important thing we provide is leadership. If we look back at the last four or five years we had to lead our clients through a very tough time. Not only do we have to lead them through the development of a personal financial plan, but we also have to lead them through incredibly challenging market conditions. I think those clients who trust our leadership have the greatest outcomes.

The other part of leadership is that even people who are smart about investing money dont think clearly when it comes to family. Its important to have someone objective with a thorough understanding of financial planning who looks at the situation from the outside.

--Tom McGuigan, Exencial Wealth Advisors

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Paula Vasan