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Navigating The Double Consolidation Process To Help Parent PLUS Student Loan Borrowers Reduce Loan Burden

September 27, 2023 07:01 am 0 Comments CATEGORY: Debt & Liabilities

When it comes to advising clients on student loan issues, many financial advisors might first think about recent graduates seeking advice regarding the most effective way to pay down their balances. However, the number of Federal student loan borrowers over the age of 50 has increased significantly in the past 20 years, with many of these borrowers holding Parent PLUS loans that were used to help fund their children's undergraduate education.

While student borrowers of Federal Direct loans are eligible for a range of Income-Driven Repayment (IDR) plans – including the newly introduced Saving on a Valuable Education [SAVE] plan – that can reduce required monthly payments significantly compared to the standard repayment option (depending on the borrower's income), available IDR plans for those with Parent PLUS loans are much more limited, often resulting in substantially larger monthly loan payments. Which not only cuts into a parent's current cash flow, but also limits their ability to save for their (potentially fast-approaching) retirement.

Nonetheless, Parent PLUS borrowers (and their advisors) have an opportunity (until July 1, 2025) to access more generous IDR plans by using a "Double Consolidation" loan strategy. With this option, a parent borrower first consolidates their existing Parent PLUS loans into 2 Direct Consolidation loans, and then consolidates these 2 Direct Consolidation loans into a single new Direct Consolidation loan. The resulting loan would be eligible for more favorable IDR plans, including the SAVE plan, otherwise unavailable for those with Parent PLUS loans. Importantly, while this process might seem relatively straightforward on the surface, the multi-step process must be completed accurately and completely to ensure that the resulting Direct Consolidation loan is eligible for preferential IDR options.

Notably, given the looming July 2025 deadline and the importance of completing the Double Consolidation process (which can involve many paper forms and take 3–6 months in total) accurately and in a timely manner, advisors can play an important role in guiding clients with Parent PLUS loans through each step of the process. Further, advisors can help clients who complete the process choose the best IDR option for their situation and take steps to minimize required payments, from deciding whether to elect to file taxes separately (for married couples) to finding ways to reduce the borrower's Adjusted Gross Income.

Ultimately, the key point is that as more individuals 50 and older hold student loans, financial advisors may find that an increasing number of clients are facing the challenge of paying down loans taken out for their children's education expenses while also trying to save for their own retirement. And for those clients who currently have Parent PLUS loans (or who are planning to have such loans and who can complete the consolidation process before July 2025), advisors can add significant value by supporting them through the complex process of Double Consolidation, which could be an effective way to help them save on their children's education and, at the same time, to free up more of their wealth to pursue more of their other important financial goals!

#FA Success Ep 352: Finding Personal Scale By Leveraging Yourself Through Outsourced Delegation, With Bridget Venus Grimes

September 26, 2023 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 352nd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Bridget Venus Grimes. Bridget is the President of WealthChoice, a virtual independent RIA that oversees nearly $80 million in assets under management for 68 client families, and Co-Founder of Equita Financial Network, an advisor platform that helps advisors plug in and share resources.

What's unique about Bridget, though, is how, as a solo advisor, she found herself overwhelmed with the pressures of having to manage different aspects of her business while also providing great service to her clients as she quickly grew to $77M of AUM in 7 years, and has decided to not to "scale" her firm by hiring more advisors but instead leverage herself personally by delegating more and more of her non-financial-planning tasks to virtual outsourced contractors she doesn't have to manage on a day-to-day basis.

In this episode, we talk in-depth about how Bridget went about outsourcing compliance, operations, trading, investment research, and even her client scheduling to build a trusted team of virtual professionals so that she can focus more on the financial planning work with clients she enjoys most, why Bridget and an advisor friend of hers decided to work together to vet a long list of trusted outsourced service providers in the hopes of purchasing services together to negotiate better rates and then ultimately launched Equita Financial Network to give other advisors a chance to plug-in to their negotiated outsourced rates as well, and why Bridget decided to focus on a niche of female executives because she felt she could relate to them the most (having spent a career as a female executive herself) and that focused on one ideal type of clientele would allow her to streamline her processes better (as they share so many of the same financial issues).

We also talk about why, after working for an RIA as an employee advisor, Bridget became frustrated with how she was compensated and a lack of freedom to serve her niche of female executives in the way she saw fit which inspired to launch her own firm where she could have more control over client service, her own destiny, and her paycheck, how Bridget spent $30,000 to get support in writing a book that focuses on the 4 common financial planning derailers women executives face without any expectation that she'd even generate enough book sales to cover that cost because she thought the credibility of being author itself made it more than worthwhile, and how, even though Bridget has long been adamant about not hiring W-2 employees, she has ultimately decided to bring on her daughter as an advisor because even though she doesn't have any plans to retire or sell her practice anytime soon, she wants to ensure the future of her business by creating a succession plan with another advisor she's confident will maintain her approach to financial planning with her clients.

And be certain to listen to the end, where Bridget shares why she feels one of the best moves she made for her business and herself was engaging with Limitless Coaching because, in the same way she delegates business responsibilities, she was able to leverage the expertise of a professional who could help elevate her and outline better metrics to guide towards the next level of success, how Bridget learned the importance of not second-guessing yourself and only working with clients that are really a good fit after one of her biggest clients became difficult to work with and despite compromising her fee (against her better judgment) to try to retain him the client still left (costing her a lot of money and time anyway), and why Bridget encourages other advisors looking to start their own practice to invest in themselves by engaging in business coaching so that they can get clear on how they want to shape their business and career before launching (just as Bridget has been intentional about what types of clients she wanted to work with, and how she wanted to leverage herself but not have to manage anyone, to live her ideal practice).

So, whether you're interested in learning about the specific vendors (and people) that Bridget delegated portions of her business to, how she navigated decisions about not just what to delegate, but how and to whom, building an infrastructure of trusted vendors along the way, and why she wishes she had 'taken the leap' to start her business years ago, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Bridget Venus Grimes.

50th Anniversary Of The CFP Marks: The Journey, Current State Of CFP Board, And Growing The Financial Planning Profession

September 25, 2023 07:01 am 0 Comments CATEGORY: Planning Profession

In the mid-20th century, the first phone call for a person who needed guidance on saving or planning for retirement was likely to be to a stockbroker or a mutual fund or insurance salesperson. But while some of these salespeople may have certainly been able to provide sound advice, there was really no way at that time for a consumer to know which among the many brokers and agents out there were actually capable of giving true and sound advice that would help them reach their goals. So, in the late 1960s, a movement began to organize and promote best practices that would establish financial planning as a true profession. As a result, in 1973, a group of 35 planners became the inaugural recipients of the CFP marks.

In this guest post, CFP Board Chair Dan Moisand reflects on lessons learned on the 50th Anniversary of the first class of CFP certificants (which has seen the number of certificants grow from that initial 35 to approximately 97,000 active CFP professionals today), assesses the current state of CFP Board and its multipronged approach towards both serving the public and promoting the financial planning profession, and lays out what's needed for financial planning to continue its evolution towards becoming a 'true' profession on the same levels as law and medicine.

The rising popularity of CFP certification was thanks in large part to CFP Board's setting of rigorous educational and examination requirements that established a high bar of competency for those who wished to use the CFP marks. Gradually, CFP Board also raised the ethical standards for CFP professionals, introducing a fiduciary standard on financial planning in 2008 and, in 2020, an expanded fiduciary standard that applies whenever the certificant is giving financial advice. And despite occasional setbacks (such as the 1999 introduction of an "Associate CFP" designation, which was poorly received because it was seen as lowering the standards applicable to those who called themselves CFP certificants) and a highly publicized 2019 Wall Street Journal article that found numerous CFP certificants with undisclosed disciplinary histories (which exposed the limitations of allowing certificants to self-report their own disciplinary events, leading to an overhaul of how CFP Board oversees the investigation and enforcement of disciplinary cases), CFP Board's efforts to expand public awareness has led to widespread recognition of and preference for CFP certification among the audience of potential consumers.

Looking ahead, CFP Board's main challenge involves balancing the need to maintain (and, where necessary, raise) the competency and ethical standards for CFP certificants against the urgent demand for more financial planners, and also to increase diversity within the profession to serve a wide range of financial planning needs among the general public. Which has led the CFP Board not only to review various standards that relate to obtaining and maintaining the right to use the marks, but also to split itself into a new 501(c)(6) entity (that can more directly promote the financial planning profession itself – both to consumers and potential CFP certificants) alongside its existing 501(c)(3) entity (that will continue to serve for the public benefit).

Ultimately, as the number of CFP professionals projects to surpass 100,000 in the next 12–18 months, CFP Board will inevitably encounter challenges in upholding its standards among an ever-widening base of certificants – made more complicated by the fact that, as a non-regulatory authority, its ability to enforce its standards is essentially limited to being able to prevent someone from using the CFP marks if they violate the standards. However, as CFP certification and public awareness continue to grow, the value of certification will grow in kind, which serves as its own motivation to continue to serve the public well for CFP certificants – which, in turn, will continue to help financial planning move towards an 'established' profession that benefits both the general public and CFP certificants themselves!

Weekend Reading For Financial Planners (September 23-24)

September 22, 2023 02:03 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" - this week's edition kicks off with the news that the Investment Adviser Association has petitioned the SEC to ask the regulator to change how it defines a small adviser from one with less than $25 million under management to a firm with 100 or fewer employees. The group argued that this change would help more small firms, which tend not to have the same staffing and resources compared to their larger counterparts, as the SEC contemplates a growing number of new and amended rules.

Also in industry news this week:

A survey suggests that wealthy individuals across all generations are interested in engaging with advisors on social media, with YouTube being the top platform chosen by respondents
Amid an avalanche of claims for the pandemic-era Employee Retention Credit, the IRS is halting the processing of new claims until 2024 and plans to closely scrutinize those that have already been made

From there, we have several articles on financial choices:

How advisors can help clients see that there usually are more than 2 options when it comes to making financial decisions
While clients might be frustrated when their advisor says, "It depends," advisors can add significant value by helping them make the best decision today while working with them to make adjustments over time if circumstances change
Why having "enough" financial independence might be a better goal than a myopic focus on being able to retire early

We also have a number of articles on marketing to affluent clients:

How offering a "second-opinion service" can help advisors generate more referrals from clients and centers of influence
How advisors can help clients plan for the upcoming sunset of the lower gift and estate tax exemptions under the Tax Cuts and Jobs Act
Why giving prospects room to talk, rather than trying to convince them of the merits of an advisor's strategies, could be a more effective way to convert them into clients

We wrap up with 3 final articles, all about setting and adjusting goals:

Why, when it comes to career planning, it can be more effective to focus on what one wants to be known for rather than the titles or positions they want to attain
Why setting flexible goals often can be more effective than fixed or "SMART" goals
How a "chuck-it list" can be a useful companion to a "bucket list" when it comes to setting goals

Enjoy the 'light' reading!

Kitces & Carl Ep 121: Can You Just Do Good Work And Get Noticed As An Advisor Or Do You Have To Self-Promote?

September 21, 2023 07:04 am 0 Comments CATEGORY: Kitces & Carl Podcast

Regardless of the size of a financial advisory firm, clients are a constant necessity to sustain a profitable business. And while some form of advertising is how firms have traditionally attracted clients, some advisors have asked if not actively marketing themselves can be a viable option, where new clients find their way to the advisor through a referral network who vouches for the good service they provide. Notably, while some businesses have achieved phenomenal success with little to no marketing efforts, is it realistic for financial advisors to anticipate success without promoting themselves, but by simply providing exceptional work for their clients?

In our 121st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the importance for advisors to advertise their expertise, and whether focusing on providing exceptional work can be enough to attract and acquire clients to sustain a healthy and remunerative business.

As a starting point, there are unconventional marketing principles that can help advisors who do not want to engage in traditional marketing campaigns to effectively attract and acquire clients. For example, by getting very specific about the financial issues they can solve – whether they involve optimizing tax loss harvesting opportunities or helping professionals negotiate better salary and compensation agreements – advisors can establish credibility and build the trust that is essential in establishing a steady stream of referrals. Because if clients know from the start that an advisor has the knowledge and expertise to solve their specific financial problems, they will be more likely to engage with that advisor… and then to let others know about their positive experience.

Importantly, whether advisors choose to advertise themselves by using traditional marketing strategies or by focusing on more unconventional approaches, being very clear on how they can solve specific financial issues for their clients and delivering exceptional service to their ideal client can help them build a reputation that naturally attracts clients to engage with their services. And as advisors build a reputation based on their expertise, their visibility – and their chances of creating a robust stream of word-of-mouth referrals – will also grow.

Ultimately, advisors who can provide exceptional service to their clients don't necessarily need to promote themselves through commonly used avenues of advertising (e.g., creating social media content or using SEO tactics), because satisfied clients can be a powerful source of referrals, especially when their advisor has expertise in solving a very specific set of financial problems. And by projecting this message, an advisor's referral network can help the advisor maintain a profitable business without the advisor needing to spend any advertising dollars – all while attracting precisely the type of clients the advisor enjoys serving!

How Sequence-Of-Inflation Risk Impacts Retirees Beyond Just Sequences Of Returns

September 20, 2023 07:02 am 0 Comments CATEGORY: Retirement Planning

30 years ago, when financial plans relied mainly on constant investment return projections derived from straight-line appreciation and time-value of money calculations, financial advisors began acknowledging and accounting for the variable and uncertain nature of investment returns. And by turning to tools that incorporated historical or Monte Carlo simulations, advisors were able to examine the potential impact of sequence-of-return risk on an investor's portfolio, modeling those risks across hundreds or thousands of scenarios into a client's personal retirement plan and refining the design of realistically sustainable spending strategies for the client. But despite recognizing the impact of investment variability and sequence of return risk on a financial plan, advisors have generally ignored the same historical trends for inflation in their clients' financial plans. Ironically, while treating investments as uncertain and risky, inflation has generally been modeled as static and risk-free. Which misses the mark with respect to the impact of inflation's historical variability and potential sequencing risk on consumers and investors.

The high variability of inflation over the last several decades – with the high rates of the early 1980s dipping down to the lows in the late 2000s (even in just the last decade, the US has seen both mild deflation in 2015 and inflation of over 9% in 2022) – makes a strong case for treating inflation as uncertain and variable in financial planning. Sequence-of-inflation risk can substantially impact a financial plan and failing to consider this risk can lead advisors to overestimate sustainable spending and underestimate risk in retirement. Though most plans are affected at least somewhat by inflation risk, certain factors make accounting for it especially important. If inflation is expected to be high or especially variable or uncertain, or a plan has substantial not-adjusted-for-inflation cash flows (as found in many pensions), a higher bond allocation, or a higher probability of success (>70%), failing to consider the variability of inflation and sequence-of-inflation risk will likely distort plan results and make them less dependable. In these situations, modeling variable inflation can help reveal risk that isn't otherwise apparent when inflation is kept constant. By exploring high-inflation, low-inflation, and mixed-inflation scenarios, advisors have the flexibility of customizing advice that can more holistically balance a client's spending goals with their risk tolerance.

Ultimately, the key point is that inflation is far from a static factor and is just as variable and uncertain as the other key aspects of the plan. And when its variability is not accounted for, the quality and resilience of the advice in a client's financial plan can suffer, especially for those with lower portfolio returns and higher probability-of-success expectations. But by treating inflation realistically, accounting for its variability, and acknowledging the sequence-of-inflation risk that clients are faced with, advisors can leverage multiple scenarios to create a robust plan and ensure they are offering the best recommendations for their clients!

#FA Success Ep 351: Facilitating Successful Advisor Mergers & Acquisitions By Avoiding The Conflicts Of A Success Fee, With Jessica Polito

September 19, 2023 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 351st episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Jessica Polito. Jessica is the Founder and Principal for Turkey Hill Management, a mergers & acquisitions consulting firm that assists financial advisors with the sale, acquisition, integration, or merger of their firms.

What's unique about Jessica, though, is how she has built a practice helping financial advisors and their firms navigate the intricacies of buying, selling, or merging their firms by deeply understanding their business expectations, educating them on the transaction process, valuing their firm so they can get the best deal for them, and guiding and providing counsel to them through the transaction process… while doing so without the conflict of an investment banker’s success fee.

In this episode, we talk in-depth about how Jessica leveraged her investment banking experience in wealth management mergers and acquisitions to build her own business where she could provide more independent M&A advice, why and how Jessica developed her flat-fee advice model for mergers and acquisitions to, similar to the evolution of fee-only RIAs, be able to demonstrate that her services are not incentivized by just getting a sale at the end and that she is truly providing advice she feels is best for her clients, and how Jessica helps her advisor clients parse through a seemingly overwhelming number of potential buyers and understand how to negotiate the terms of their agreements so that they can find the right deal for them that aligns with their business goals.

We also talk about why Jessica cautions her clients and advisors considering selling their firm to not base their asking price in comparison to the purchase price of other firms as without context on how the price and more importantly the terms were decided, why Jessica counsels that advisors who want to retire in 3-5 years need to start not just preparing for a sale but actually beginning the transaction now (because it can take several years to finalize a deal and wind down the post-sale retention contingencies), and why Jessica feels advisors considering a sale in the more distant future should actually spend less time trying to go through the laundry list of updates to their firms to extract the top value and should instead focus on simply doing what is right for their business that keeps it on a healthy growth track (because that is what will make their business most attractive, whenever the time comes to sell).

And be certain to listen to the end, where Jessica shares why, because she works on her own, she is intentional about the number of clients she works with at any given time so that she can both provide dedicated service and preserve time to spend with her family, how Jessica dealt with imposter syndrome and the fear of being compared to larger institutions with longer histories by investing into developing and sharing her own thought leadership through podcasts, videos, and conferences, and why Jessica defines success differently for her professional and personal lives in that professionally, success is a moving target (because she feels that without new goals she may become complacent and limit herself), while personally, success is continuing to build her business (especially in a male-dominated industry) and take chances so that her children can see that she kept trying even if that meant she might fail, and ultimately that she made something she is proud of.

So, whether you’re interested in learning about how Jessica helps advisory firm owners sort through the ‘noise’ of different proposals to find viable potential deals, how Jessica discerns when to use an EBITDA or a revenue multiple to value firms or practices, or what other ‘fine print’ Jessica feels is important to understand before engaging in an M&A deal, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Jessica Polito.

How A 3-Person Team Optimizes Advisor Capacity For Firm Growth

September 18, 2023 07:07 am 1 Comment CATEGORY: Practice Management

When an advisor runs their own solo advisory firm, their capacity to meet with current and prospective clients is limited to the extent that they are also responsible for all of the non-client-facing tasks of running their firm. Which may not be a serious limitation when they are just starting out and don’t have a lot of clients to serve, but as the firm grows, they will eventually run out of time available for working with clients – at which point, it becomes necessary to decide whether to stay a solo firm (without taking on more clients) or to hire support staff to free up more time for the advisor/owner to prioritize client work and optimize advisor capacity.

Advisors who have never hired before may have little idea of what to expect once they do decide to hire. Will they be able to support themselves with the additional overhead cost of their employees? What type(s) of employee should they hire? Will they actually get to spend any more time working with clients, as was the original goal?

Data from the 2022 Kitces Research Study on “How Financial Planners Actually Do Financial Planning” provide some answers about what advisors can expect when going beyond a solo practice, shedding light on the impact that hiring has on advisor capacity. According to the study, solo firms with no employees had a median of just 40 clients per advisor, while 2-person firms had 70, and 3-person firms had 96, as the advisor leverages themselves and their time by building a support team of a Client Service Associate (CSA) and an Associate Advisor around them. Notably, though, at 4 employees and beyond, the number of clients per lead advisor tends to go down from its peak of 96, as teams at this size typically begin to add another lead advisor. In other words, a 3-person team really seems to be the sweet spot where advisors are able to maximize their capacity, meaning that solo owners who want to hire 1 employee to focus more on client-facing work perhaps really ought to consider hiring 2 instead – while those who are already on a 3-person team might want to think twice about going much farther beyond that!

Additionally, while many firms tend to first hire a Client Service Associate (CSA) as their first hire and add an Associate Advisor later as their second, the actual job description of an initial hire really depends on what types of tasks the advisor wants and needs to delegate first – which in practice tend to be some of the advisor’s least-favorite work (hence why the CSA’s paperwork-heavy duty often gets delegated first), but can mean that an initial hire can really be more of a hybrid role, growing into one that is more specialized as the advisor delegates more and more tasks as the firm continues to grow. And to some extent, the needs of the first hire will vary depending on what the advisor themselves is good at doing (e.g., advisors who struggle with paperwork may hire a CSA first, while those who excel at building systems and process may hire the Associate Advisor first, and later a CSA to leverage them both).

Ultimately, what’s most important for advisors looking to hire is to have a plan for growth since the significant overhead cost of employees can greatly erode a firm’s profits until it can add enough revenue to make up the difference. Fortunately, what the data show is that hiring can open the door for this growth by boosting the advisor’s capacity and (as is presumably the primary goal) giving them the time to meet and bring in new clients!

Weekend Reading For Financial Planners (September 16-17)

September 15, 2023 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" - this week's edition kicks off with the news that a recent survey indicates financial advisors are the most trusted source of financial advice for consumers across generations, and are particularly trusted among wealthier individuals. Further, the survey results suggest that advisors who offer comprehensive services tailored to the needs of their target clients are likely to be more successful both retaining their current clients and in attracting clients who might be dissatisfied with their current advisor and their service offering.

Also in industry news this week:

The SEC agreed to a series of settlements with 9 RIAs resulting from charges of improper use of hypothetical returns in advertising under the regulator's marketing rule
How several CEOs of large RIAs and AdvisorTech companies have found that receiving funding from private equity firms and taking the responsibility for the high growth expectations that come with those dollars can potentially cost them their jobs, or at least turn their leadership positions into jobs they no longer want

From there, we have several articles on retirement planning:

How advisors can use "retirement mentorship" programs to help clients nearing retirement feel more confident making the transition
While many clients look forward to the freedom retirement provides, those leaving the workplace can potentially lose certain things as well, from their sense of identity to structure in their daily lives
The range of paths available to those who have achieved financial independence that can provide purpose and fulfillment

We also have a number of articles on practice management:

Why setting clear expectations and demonstrating a culture of professionalism are crucial for firms looking to make a successful hire
What job candidates are looking for in the current tight advisor labor market and how firms can woo their top prospects effectively
How firm owners can avoid potential pitfalls when hiring and training next-generation advisors

We wrap up with 3 final articles, all about the psychology of decision-making:

While it might be tempting to lament previous decisions that were (or weren't made), the likelihood that these choices would have turned out exactly as one might imagine is low
How advisors can help their clients make the most of the inevitable "plot twists" that arise in life
Strategies advisors can use to overcome the common reluctance to ask for help

Enjoy the 'light' reading!

Why The Common Approach Of “Think It Over” Might Work For Product Sales, But Undermines Service-Based Financial Planning Relationships

September 13, 2023 07:02 am 0 Comments CATEGORY: Financial Psychology

For many financial advisors, encouraging new prospects to "think it over" at the end of an initial meeting can seem like a gentle way to offer the prospect space to decide whether the relationship will be right for them, while at the same time, keeping the advisor from feeling that they may be coming across too aggressively by making an immediate sales pitch. However, when a prospect meeting goes really well, and the prospect clearly sees the benefit of engaging with the advisor, ending the meeting with "Think it over" can interrupt the momentum of the meeting and send mixed messages to the prospect that, even though the meeting went really well, the advisor wasn't that enthusiastic about the potential relationship (because otherwise, why wouldn't they have asked them about the next steps to engage?). Instead, advisors can take a more direct approach in introducing the next steps to becoming a client during a discovery meeting to keep the momentum going and potentially increase the chances that the prospect will become a client.

While using an approach that encourages a customer to "think it over" can work well when selling products on a transactional basis between the salesperson and the customer (especially for high-cost products where the customer's behavioral biases come into play and offer the strategy powerful support), selling services to be rendered through an ongoing relationship (such as financial advice) is a very different process and requires a different approach to result in successful sales. In particular, financial advisors who offer ongoing services to clients can focus on 3 key areas that are unique to service-based sales as part of a successful sales strategy. These include 1) minimizing the prospect's uncertainty, 2) understanding their specific problem, and 3) being a 'true' service professional (who not only is capable of selling what's being offered but can also actually follow through and do the job with skill and expertise). Which means that it's more important for advisors to sell a prospective client on their ability to skillfully understand and solve the prospect's specific problems (rather than using tactics better suited to product sales).

For advisors who may feel anxious about coming across as too aggressive in asking for the sale in the first prospect meeting, supplying an agenda in advance that clarifies that the sale – the process of signing up as a client – will be discussed can make it easier by externalizing the issue and knowing that the prospect won't be surprised by the conversation. With this approach, the prospect still has the option to agree to take the next steps to become a client or, if they're not quite ready, to tell the advisor that they still need time to think things over. Regardless of whether they are ready or not, initiating the discussion on the next steps (and with the support of an agenda) can be an effective way to close the meeting without killing the momentum while reassuring the prospect that they would be a valued client and that the advisor is very much interested in working together.

Ultimately, the key point is that selling products and selling services are 2 very different processes, and encouraging prospects to "think it over", while perhaps an effective product-sales tactic, is a less effective way to close a service-based financial planning relationship. Instead, by communicating that they have the skill and expertise to help the prospect identify, understand, and address their specific problems and can ultimately help them minimize the uncertainty that they've been struggling with, advisors can build and leverage valuable momentum with the prospect during the first meeting, potentially increasing the chances that the prospect will agree to become a client by the end of the conversation!