Wealth is so much more than money, and the pending birth of a new year provides our profession with a great opportunity to set the table for better client outcomes in 2024.
People’s “money mindset” lays the foundation for making better decisions. So perhaps we could adopt a framework for 2024 that helps our clients move towards their goals and values in a more impactful way.
Here’s a wish list for helping our clients this coming year:
Acknowledge That the Windshield is Larger Than the Rear-View Mirror
There’s a reason for this size discrepancy. What’s done is done and we can’t go back and change it, so let’s not spend time reliving the past. Instead, let’s focus time and energy on the future, moving forward toward wants and needs. Our calling should be to help our clients imagine their future and put plans in place to build the bridge from where they are today to where they want to be.
Investing time, effort and energy in moving them closer to the future they’ve imagined is both our challenge and our opportunity.
Celebrate Their Progress
Too often, we focus on what we missed, where things went wrong and what could’ve gone better. We fail to celebrate the gains that have been made. In their book, “The Gap and the Gain,” Benjamin Hardy and Dan Sullivan make the case for acknowledging how far you’ve come toward your goals vs. beating yourself up for what hasn’t been accomplished.
Financial advisors can play a powerful role in reminding clients of the progress they’ve made and helping them “keep their eyes on the prize” despite setbacks (job losses, disability, divorce, market declines, etc.). We can help clients recalibrate and stay focused on the outcome they desire despite temporary circumstances that might otherwise derail them completely.
Measure What Matters
Theodore Roosevelt said, “Comparison is the thief of joy.” Our industry is constantly robbing clients of their joy. Using an unmanaged, no fee index of 503 individual stocks selected by a committee (S&P 500 index) may not be the best benchmark for measuring the relative success of our clients’ portfolios.
We should be measuring their progress toward achieving the goals they set during our planning process. We should be measuring whether they are able to save and invest money after they’ve supported their lifestyle or paid down debt or built up their emergency reserves. Our benchmarks should be driven by their stated objectives, not an artificial construct that may or may not have anything to do with what they set out to achieve.
Focus on What Can Be Controlled
None of us can control other people, politics, the stock market or social media … just to name a few. Hundreds of millions of dollars are spent distracting us. (Ever checked an email or text only to look up 20 minutes later and find yourself scrolling on your phone, not knowing how you got there?!) Taking a few moments to remind our clients to focus their time and efforts on the things they can influence, or control, is time well spent. Proactively reaching out with calm, cool, common sense when the market fluctuates dramatically — or when headline news injects a huge dose of fear into the narrative — is one of the greatest gifts we can give our clients. Our ability to remind our clients of their plan, their goals, their why is one of our most important roles.
Protect the Wealth Being Created
Assets, life, health, income, personal information and confidential data all need to be protected along the journey. Insurance, legal documents, access to capital through lines of credit: These are “must haves” not “nice to haves”. As advisors, we are uniquely qualified to advocate for the safety nets that clients should have in place. Our clients have invited us into their lives to think of things they don’t or won’t, so we need to step up, draw the line in the sand, and insist that these important aspects are addressed.
Tax Allocation
We spend hours researching, deploying, rebalancing and reviewing the allocation of assets. Too often, we spend mere minutes on tax allocation. Helping our clients keep more of what they’ve earned by addressing the tax implications of how they earn, save, invest and distribute money is paramount.
Additional Reading: What Tuition-Paying Parents Stand to Lose
Every client deserves to understand and make informed decisions regarding how they put money to work for them. Sometimes that means going toe-to-toe with the CPA who is focused on tax savings in the current year vs. tax efficiency over a lifetime of managing and distributing wealth. We owe it to our clients (and their other advisors) to make sure they understand the big picture and see the impact decisions today will make on their tomorrows.
I hope these guiding principles serve as a “thought starter” for all of us as we transition out of 2023 and into 2024. We have such an awesome opportunity to favorably impact the lives of our clients and their families. We are blessed to be able to influence their outcomes and do well by doing good.
Beth V. Walker is a wealth advisor with Carson Wealth and founder of Center for College Solutions, which is based in Colorado Springs, Colo. She can be reached at bwalker@carsonwealth.com or 719-522-2278.
