We are all familiar with the concept of blind spots, I know I hate the one on my car. The driver side blind spot makes me so nervous so I have to check multiple times to ensure I am being safe when I change lanes.
AS WE ALL KNOW OUR CLIENTS HAVE BLIND SPOTS IN THEIR PERSONAL FINANCIAL WORLD and that our job is to educate them on these and help them avoid ?crashing? their finances because of the blind spot.
Which brings me to blind spots of your new clients. I am curious if you have a blind spot when ON BOARDING A NEW CLIENT. The biggest one I have seen with Financial Advisors is on the Liability side of the balance sheet of their clients.
Let me share with you a recent experience I had with a FA who includes Liability Management into her practice. The first step is understanding exactly where the client is today, i.e. What debts do they have now (mortgage, credit cards, car loans, etc. and what each debt is costing them in interest) and are they currently borrowing in the most efficient manner?
2nd Step ? Search out what is important to the client and what is the best debt strategy for their short and long term goals. The FA uses their discovery process to help bring clarity to this important area.
3rd Step ? Using Borrow Smart? Technology I first calculate their EPR? (Effective Percentage Rate) and then develop the right mix of debt to meet the clients goal which typically are increasing cash flow, improving credit scoring, eliminate debt and become more liquid. Here is a snapshot of this section of the Analysis with a client who needed to improve cash flow and eliminate debt:
From here, we were able to wipe out all the client?s debt with a cash out refinance on their house and lower the monthly outflow and lower their EPR?.
I have seen first hand the value of a Liability Review for financial advisors when they bring in a new client. This helps the FA add tremendous value to their practice where other advisors don?t.
Caution, Caution, Caution – This analysis goes hand in hand with setting up a system for them to ensure they don?t go right back to where they were before the refinance. AUTOMATED SAVINGS AND A HEART TO HEART WITH THEIR ADVISOR IS REQUIRED OR WE DON?T MOVE FORWARD WITH THEM DOING THIS. I don?t want to see a mountain of debt happen again.
Imagine if we could help more people become investors and getting off the debt cycle or we help our existing clients increase their savings by improving their cash flow. I am making it happen and am happy to help you do it as well. Just give me a call or send me an email to get this going.