From Main Street to Wall Street, there’s a lot of discussion about the pending “fiscal cliff,” along with speculation about what it may mean for the U.S. economy. One survey found that 33% of Americans are following news of the fiscal cliff very closely.

Late night comedian David Letterman joked, “Everybody is talking about the fiscal cliff. And I'd be talking about the fiscal cliff too, if I knew what the hell it was.”

Your clients and prospects are probably concerned about the impact of the pending changes, and you can use this concern as a talking point to strengthen your working relationship. The term “fiscal cliff” was first coined by Ben Bernanke, and has entered the lexicon with surprising rapidity. Some of your clients may not be completely clear on what it means, so here is a brief explanation that you can cut and paste into an email or use in a conversation:

What Exactly is the Fiscal Cliff?

The phrase “fiscal cliff” refers to federal spending cuts and federal tax increases that will automatically take effect on January 1, 2013.  If Congress takes no action, the higher federal tax rates are projected to increase tax revenue in 2013 and beyond, while federal spending is mandated to fall for the next several years.

In order to sidestep the cliff, President Obama and Congressional leaders will have to compromise on a wide range of issues. These include reductions in defense and non-defense spending, deciding whether to extend the Bush tax cuts, whether to raise the payroll tax, and how to deal with extended unemployment benefits and reimbursement cuts to Medicare doctors.

With the world watching, the White House and Congress are expected to act quickly to resolve the uncertainty about the country’s fiscal future. If Congress and the White House agree on a deal in early 2013, lawmakers could retroactively restore the prior tax rates and approve additional federal spending.

What Your Clients Need to Do

As a financial advisor, one important role you play is to help your clients weather the ups and downs that occur in the economy. You want your clients to make decisions that will be advantageous to them long-term, and avoid overreacting.  Here is a way you might conclude an email or message about the fiscal cliff:

“As seasoned investors know, financial markets can rise and fall with the latest cover story, whether from Washington or abroad. The best approach may be to keep your eyes fixed on your destination and not get sidetracked on day-to-day market fluctuations.

Your investments should reflect your financial goals, time horizon, and risk tolerance. And remember: when uncertainty grips the markets, it may be a great time to take advantage of new opportunities, rather than overreact to short-term events. Give us a call today and let’s take a look at your portfolio to determine whether any changes might be in order.”

Current, Consistent, Connected

Three keys to marketing success are to be up-to-date on current events, consistently offer valuable information to clients, and to stay connected with them on many levels. Digital marketing offers you the opportunity to do all three. Take a few moments today to craft an email for your contact list and offer them some timely information on this area of concern.

Craig Faulkner is CEO of FMG Suite, a company dedicated to creating digital marketing tools for today's financial professional. For more ways to make the most of your marketing efforts, check out his free online video course,The Art of Digital Marketing. You can also follow him@fmgsuite on Twitter.

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