5 Reasons Why Financial Advisors are Needed

By admin / October 22, 2020

Indians are hard-working people. This drives some of us to do many impossible things. But not everybody can be an all-rounder. As we grow old, our world view often remains rigid. ‘If I can earn money, I can also invest my own money’ — this is a common answer that many investors have given when asked about the utility of a financial advisor. In a world of free advice, people seem to think that giving advice is the easiest job. However, the truth is very different. Even the best of savers and investors cannot handle money decisions on their own. As careers, lives and financial goals become big, managing everything becomes an even more complicated task. As a result, there is a lack of smart investing choices. Consequently, our goals are not reached. Thankfully, our lives offer us a multitude of turning points. In such situations, we are forced to come face to face with reality. It is during such times that we realize the utility and the value financial advisors brings to the table. Read on to know 5 key reasons why you need a financial advisor today.

Free Advice is a Not Great Advice

Indians love cricket. All of us enjoy a good game of cricket and balanced commentary. Commentators describe the match progress and also come up with various tips on how players and captains can do well. But, would the game change if the advice of commentators is taken? Nobody really knows. This is because cricket commentators give free advice and they have no skin in the game. Free advice is often advice without any consequence. This is because such an advisor risks nothing. On the other hand, you as an investor risk everything because it is your money that is on the line. This is why serious investors must take the help of professional advisors. Fee-based advisors offer you personalized advice that is suitable as per your situation. The advice they give can be held accountable. This means if they are wrong, their reputation takes a hit. If they are right, more investors come to them.

Skill, Experience

A surgeon knows surgery. An engineer knows to engineer. In a similar vein, a financial advisor is a skilled person who knows everything about financial investments and planning. Most investors do not understand the depth of financial advice. It is not merely which stock to buy or which mutual fund to sell. Financial advisors assess the financial needs of individuals. They help them with investments, tax laws, and insurance decisions. It is a big umbrella under which there are different aspects. In this way, financial advisers provide clients with specialist advice on how to manage their money. Over the years and market cycles, such advisors collect a vast wealth of experience which is then used to add value to a client’s investment portfolio and finances.

Unbiased Decisions

The job of a financial advisor involves researching the marketplace for good investments options that are suitable. They then recommend the most appropriate products and services available, keeping in the mind the investor’s needs and budget. They also ensure that clients are aware of products that best meet their needs. All this is incomplete without unbiased decisions. For the financial advisor to give you unbiased advice, no part of his/her income should be coming from product manufacturers. This is how financial advisors are independent. They do not advise you about a certain product because the commission is high on the same. Only that product is recommended which is the best fit for you.

Regulated Profession

Investment advisors are regulated by Sebi in India. No longer can somebody just appear out of nowhere and become an expert. There are strict guidelines that they have to adhere to. The Sebi came out with Investment Advisers Regulation in 2013 that segregated commission selling from investment advice. The regulations demand a higher degree of competence on part of an advisor. To be eligible, you need to have a professional qualification or postgraduate degree or postgraduate diploma in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science. Or, the person has to be a graduate in any discipline with an experience of at least five years in activities relating to advice in financial products or securities or fund or asset or portfolio management.

Read the full article here >> https://www.entrepreneur.com/article/326976

Why Every Entrepreneur Should Consider A Financial Advisor

By admin / October 22, 2020

I began my career working at a large corporation where everything was handled for me: health insurance, tax withholdings, retirement plans and more. When I quit that career path a few years later to start my own company, the financial aspects were foreign to me.

As many entrepreneurs — including myself — will attest, the volatility of revenue is one of the most frustrating parts of owning a startup. For a client-funded company like ours, there can be a huge variance in the number of clients and size of retainers live at a given time. It can be a lucrative business, but without a significant investment of time and resources, it’s an inconsistently lucrative one.

For someone in her late 20s who never developed an independent financial strategy, this was obviously jarring. I had no budget plan, no retirement savings (aside from a small rollover IRA) and no sense of how to leverage my company as part of a larger strategy. My initial instinct was to do my own research. If you haven’t tried this before, don’t start now. There is a black hole of financial advice on the internet, all of it full of jargon and contradictions. I finally got a recommendation for a financial advisor from a close friend and scheduled a meeting with a long list of questions.

From the first meeting, my financial advisor was relatable and accessible — he took interest in my personal and professional life and developed a multifaceted financial strategy that actually made sense to me.

For entrepreneurs without an employer who offers a 401(k), it’s crucial to get set up for retirement (and life!), but for a novice, that is a daunting task on your own. My financial advisor set me up with diversified options that I never knew existed and explained the importance of diversifying my investments within my portfolio.

He also adjusted these plans when necessary to fit both my co-founder and me. My co-founder is middle-aged, married, a homeowner and has three kids; I am a millennial who rents and has no financial dependents except for a small dog. Our financial advisor set us up with a simplified employee pension (SEP) IRA plan that works for us both and provided information on company health plans. He also set us up with disability and life insurance policies to fulfill a buy-sell agreement for the business. For co-founders with different lifestyles and priorities, a financial advisor can build a mutually beneficial custom strategy.

Taxes present another pain point for startups, especially with ever-changing laws. There are so many variables, from how the business is registered to the types of deductions you take. As our financial strategy became more sophisticated, we needed an accountant to align our taxation process. My financial advisor set us up with an accountant in his office who handles our taxes and bookkeeping. They work together to ensure we have a comprehensive strategy and are taking advantage of everything available to us.

On a personal level, the most valuable service my financial advisor provided is perspective. He has helped a frivolous girl like me analyze her finances, identify life goals and plan for a rainy day — most importantly — never in a judgmental way.

Read the full article here >> https://www.forbes.com/sites/forbesnycouncil/2018/04/20/why-every-entrepreneur-should-consider-a-financial-advisor/#5ad0929168f7

The Financial Advisor as Entrepreneur: 10 Entrepreneurial Skills

By admin / October 22, 2020

The word “entrepreneur” is of French derivation (entreprendre, to undertake) and is defined as: a person who organizes, operates, and assumes the risk of a business. With this definition, it is clear that most all financial advisors are entrepreneurs.

Of course, in some cases the broker-dealer shares some of the entrepreneurial risks of the business. The b/d might pay the light bill, or be responsible for the office lease, or provide for many of the other fixed costs that are important in sustaining a financial advisory business. However, even in these cases there is little question that the financial advisor is ultimately responsible for the long-term success of their business.

No one else but the financial advisor will be responsible for the organization, operation, and overall vision for the business that they build.

With that said, ClientWise research has observed that there are 10 Entrepreneurial Proficiencies that contribute to the future success of those financial advisors who are, or aspire to be, entrepreneurs. As you review the proficiencies below, consider how you rank in each category, and what you might like to work on to better yourself…now and into the coming year.

10 Entrepreneurial Proficiencies

1. Vision: Creates and communicates a compelling and inspired vision and sense of core purpose. Leads on the vision of the future, not on the reality of today.

2. Strategic Agility: Can see ahead clearly and anticipate future consequences and trends. Has broad industry knowledge and perspective. Future-focused. Can articulate vision, possibilities, strategies and plans.

3. Client Focus: Clear understanding of client’s needs, preferences, interests, timelines, and decision-making criteria. Can walk in the shoes of the client and speak their language.

4. Communicator: Relates well to all kinds of people, inside and outside the team, and firm. Ability to influence, persuade, and build constructive relationships with others.

5. Motivator: Ability to inspire and motivate others, communicates and sells the vision and future. Charismatic and persuasive.

6. Flexibility: Ability to adapt to dynamic environments with ease and speed. Thrives on change.

7. Low Risk Aversion: Ability to take and manage appropriate risks and use to the organization’s advantage. Can step into the unknown and allow the company/team to take steps to outpace the competition.

8. Business Acumen: Knowledgeable in current and future trends, practices, and exogenous factors affecting the industry and business. A firm understanding of competitors and a good grasp of effective strategies and tactics that work in the marketplace.

9. Embrace Ambiguity: Can cope with and embrace change and use it to advantage. Ability to act without having the total picture.

10. Continuous Learner: A quick, relentless, and versatile learner. Can analyze the successes and failures and learn from experience.

Read the full article here >> https://www.clientwise.com/blog/blog/bid/80349/the-financial-advisor-as-entrepreneur-10-entrepreneurial-skills

6 Proven Ways Financial Advisors Can Grow Their Businesses

By admin / October 22, 2020

This article is written by Patrick Brewer, founder of Brewer Consulting, host of “The Model FA” podcast, and an Advisor in The Oracles.

Building a financial advisory practice isn’t easy. Letting go of a stable paycheck, hustling to add clients, figuring out the back-office logistics of client service and compliance — those early years are tough by any measure.

And unfortunately, many advisors make their path even harder by compromising their own growth trajectory.

One of the biggest mistakes I see advisors make is spending time and money on activities that don’t move the needle on their business. The result? Less income, more headaches, and clients who aren’t ideal.

The good news is that any advisor can follow a proven model to grow. If you’re just starting out, the right model can propel you to success quicker than you ever thought possible. If you’re well established, it can overlay your existing business model to supercharge your results.

As someone who has built a financial advisory firm from nothing to $50 million in assets under management in just three years, here is my proven growth advice.

1. Find your niche.

A niche, or client base, is a group of people with a particular problem that is strongly felt. Every advisor needs to consider a niche. A niche will allow you to create a highly specialized offer, a focused marketing strategy and sales process, and an amazing client experience.

Unfortunately, many advisors get this wrong. Some define their niche as anyone who has a certain amount of money. As a result, their marketing, operations, and sales have no focus or direction — which leads to subpar results. You shouldn’t simply be looking to work with anyone who has $5,000 or more to spend. Instead, you should focus on becoming the go-to financial advisor for your ideal clients (for example, board-certified plastic surgeons in California, which has more practitioners than any other state).

Others choose a niche without doing due diligence on long-term sustainability. Getting over-specialized won’t automatically pave the way for growth. In fact, the key is to be realistic. Work with a group that has a real problem and the means to pay you. Then test your ability to reach decision-makers in a way that’s reliable and financially feasible.

2. Build your offer.

Once you figure out who you serve, engineer your entire client experience to speak to that person.

It’s so important to define your offer before you start to sell. This allows you to communicate to your niche that you are a perfect fit for them. It also makes it easier to productize the offer, which is key for future marketing and sales efforts.

Don’t be put off by the terminology. Productization is just the act of positioning your service to speak to the specific, relevant pain points your market faces. This immediately differentiates you and positions you as the perfect — and premium — choice in your market.

Taking our previous example of plastic surgeons, say you’re offering advice that will help them pay back student loans, start a strong savings program, and assess whether they have appropriate insurance coverage. You might productize this service by positioning it as the “plastic surgeon financial accelerator program,” for instance.

3. Crush your marketing.

This isn’t just about running ads.

Marketing in financial services is all about delivering value so you can capture the attention of the right people.

Financial advisors sell a relationship, and that relationship is built on trust. For people to trust you, they have to understand who you are first. You need to find your niche and share yourself with them — what you believe, what you disagree with, and your personal stories and experiences that are relevant to building a relationship with these people.

LinkedIn can be a great channel to start. You can reach plenty of people by searching for professional affiliations. Remember to include professionals who provide services to plastic surgeons, such as practice management consultants or pharmaceutical reps. That way, you can grow your network and eventually share audiences with them.

You’ll also want to interact inside of LinkedIn groups, jump in on conversations, and add value. You might share videos posted on your YouTube channel or blog posts related to how plastic surgeons can improve their financial situation, for instance. Facebook groups can be relevant here, too.

Different niches call for different strategies. The key is to understand where your niche spends time and gets their information (online or offline). Learn who serves your niche; then build relationships with both prospects and other professionals by creating a lot of value for them.

4. Magnetically attract prospects.

Once you’ve started marketing to your niche, you need to get them interested in your offer.

A highly successful way for advisors to do this is through a give-to-get offer. Offer a freebie that gets your target in the door — while creating immense value for them.

For a plastic surgeon, it might be a free financial evaluation of their practice. You can offer a gratis consultation where you walk them through a risk assessment or evaluate their tax strategy.

The goal of your offer is to add value, get a better understanding of their problems, and secure “micro-commitments” from them on the challenges they face. With an established understanding of the prospect’s pain points and the goodwill built through delivering value up-front, you will find that the sales process will move forward organically.

5. Automate your processes.

Once you have leads coming in the door, you will need the right technology, processes, and automation in place to make your practice run like a machine.

Automation can offer a significant boost to efficiency; however, not everything should be automated. Don’t try to automate the client experience. Clients need to feel like they’re the only person in the world. But other workflows such as trading, rebalancing, and reporting should be automated to free you up and allow you to focus on delivering exceptional hands-on client service.

This includes using cloud-based technology to automate processes and workflows, and training staff in creating and following standard operating procedures. That way, if you lose an employee, you can bring another person in and train them quickly.

6. Create raving fans.

Finally, tie it all together by providing uncommon service that turns clients into raving fans — and gains you referrals. This type of service isn’t easy. It requires going above and beyond the call of duty.

Shower your clients with attention. Show them you are grateful for their business. Think outside the box. Dial in on a client’s personal obsession, like music or art. Offer to take them to a show or exhibition.

Read the full article here >> https://www.entrepreneur.com/article/336594

8 Considerations When Choosing Your Financial Adviser

By admin / October 22, 2020

As business owners, we need to wear many hats. But we’re used to that. We’ve become quite accustomed to handling the sales and accounting and the customer service. Marketing department? That’s us. Complaints? We’ll handle that. After all, it’s out business and our name on the line.

But one thing that many entrepreneurs fail to do early on is to hire a financial adviser. But what is a financial adviser, really? Wikipedia describes it as a person “who suggests and renders financial services to clients based on their [specific] financial situation.” 

At the end of the day, this person is quite frankly one of the most important people you’ll bring into your life. Not only for your personal finances, but also for your business. Having the right guidance when it comes to things like money and taxes and your investment vehicles is tantamount to your success. 

Now, this isn’t just about getting rich. Sure, if you’re already uber wealthy, you likely have a financial adviser. And this also isn’t about saving your way to wealth, or finding some system to make money online. Everyone can make money. But not everyone can plant the right seeds and navigate the murky waters of creating long-term and sustainable wealth. 

However, going about finding a financial adviser is something that scares most entrepreneurs. How do you actually pick the right individual for your situation? What are the metrics you need to consider? At the end of the day, it really boils down to 8 underlying ways to choose the right person who’s fit for the bill. 

Jim Dew, the founder of Dew Wealth Management, has been a financial adviser for over two decades now and is trusted by some of the world’s most astute entrepreneurs and business owners to manage their money. Dew says that when it comes to managing your finances, finding the right financial adviser is no laughing matter. 

Why is it so important? At the end of the day, it’s your money. Ensuring that you’re working with the right people to manage that money is quite possibly one of the most important decisions you’re going to make. We’ve all seen and heard of the seedy underbelly of the financial services industry. We know the perils that exist when we choose the wrong path. 

Not only do you have to find the right person to manage your finances, you have to understand what to steer clear of as well. There are sharks in the water if you’re not careful. That much is obvious. But how do you go about identifying those that have ill-intentions as opposed to those who have your own interests in mind? 

Finding the right financial adviser.

I’ve had a good deal of experience with financial advisers in the past. One thing that you have to avoid like the plague is getting involved with an individual who has a direct benefit in the investments they’re recommending to you. However, it isn’t always as clear as the light of day to identify a situation like this. There are always back channels that exist. But you should do your best to do the right amount of due diligence. 

Be wary of those that try to push you aggressively into one investment over another. Your financial adviser should try to first understand your situation before trying to recommend something to you. Tony Robbins speaks about the perils of advisers, 401K and other investment vehicles taking high fees in his best-selling book, Money: Master the Game, and paying out commissions to those who brought you into the so-called fold. 

According to one study on the conduct of financial advisers published by Mark Egan, Gregor Matvos and Amit Seru discovered that while there have been many highly publicized tales of misconduct, most cases haven’t been systematically documented and brought to light. This was the first large-scale documentation of misconduct in the industry, and the results are rather alarming. 

The study found that more than half of the households in America sought advice from financial advisers back in 2010, and that there were over 650,000 active advisers managing over $30 trillion in assets. Yes, trillion. Here are some key facts from that study. 

  • Over 20 percent of advisers in some of the counties in states like Florida and California have received disciplinary actions against them.
  • More than half of the advisers who engage in some form of misconduct, end up keeping their jobs the following year to advise more individuals.
  • Financial advisers considered to be “past offenders” are, in fact, 5 times more likely to repeat that offense than those who haven’t been disciplined in the past
  • Fourtyfour percent of advisers who lose their jobs due to misconduct find a new job the following year advising more individuals

Remember, a financial adviser is like your partner. Anyone who has control over your money has to be carefully scrutinized. You can’t simply trust just anyone to help you out here. When you’re searching for a financial adviser, here are the 8 ways you can use to find the right person.

1. Find a fiduciary

A fiduciary is a legal obligation for an adviser to put your interests first. This is paramount. Dew says that many financial advisers don’t meet this standard. How do you determine if a financial adviser is actually a fiduciary? One way to find out is to simply ask them the following question. Are you a fiduciary in all aspects of our relationship? 

But don’t just take their word for it. If they do actually say yes, get it in writing. And ensure that it’s provided to you on company letterhead. A true fiduciary will have absolutely no problems doing this for you. Be wary of those who try to walk around this simple yet important request.

2. Find a specialist

Clearly, more financial advisers are interested in working with individuals with money. But if you’re not wary, you might get plugged into a system that’s designed more for a brokerage company’s shareholders or for a bank than for your own specifications and unique situation. 

You should ask the financial adviser who they want to work with before you launch into the specifics about your situation. If they’re generalists and they respond that they want to work with “Entrepreneurs, elite doctors, inherited wealth and professional athletes,” then you need to stay away. Look specifically for a financial adviser who specializes in working with business owners and entrepreneurs instead.

3. Research their background

You can check a financial adviser’s background by using FINRA’s background check or this SEC advisory search. Advisers are going to show up on either one of these databases. If they don’t, you’re working with someone who isn’t registered, so be wary. 

However, what you’ll also discover here is any history of misconduct. Remember, those that have committed misconduct in the past are far more likely to do so again. It’s also important to note that if the financial adviser has a “B” for Broker next to their name, then there might be conflicts of interest in whatever they recommend. So be careful. 

4. Locate their credentials

There are two specific credentials that are the most valuable designations for entrepreneurs who are looking for a financial adviser. The first is the Certified Financial Planner certification. The other is the Certified Private Wealth Adviser certification. If an adviser is certified, it provides a deeper sense of trust. To get certified, they need to meet rigorous requirements set by the Certified Financial Planner Board of Standards. 

You could conduct a variety of searches online. If the financial adviser you’ve been recommended doesn’t seem to be the right fit, you could easily conduct a search through Barron’s Top 1000 financial advisers list, or turn to a variety of other resources. Your due diligence here and time invested is well spent. Remember, this is your financial future on the line here. Don’t take it lightly. 

5. Assess their personality

As a fervent student of psychology, I’m always reading into certain things. Body language and other non-verbal cues send a very powerful messages. But it also helps to have face time with an individual. If you’re considering a financial adviser, assess their personality. How do they behave or respond to certain questions? 

If you feel like the relationship is more collaborative, and you feel like it’s equal ground for sharing ideas, then it’s likely a good fit. If it’s something where they’re vehemently pushing you in one direction over another, especially before they truly assess you personal situation, then it could be a sign of a deeper problem or conflict of interest. 

6. Discuss their advanced planning strategy

Some entrepreneurs think that investment strategy or performance are key factors to help them choose the right financial adviser. However, more so than that, advanced planning is actually the key. That’s why it’s important to interview any prospective adviser you might be looking to hire since no one can predict what investment strategy will do the best over the next decade. 

Clearly, the financial adviser needs to be competent. But they also need to be highly skilled at advanced planning. They need to understand how to navigate and plan for taxes, managing debt, protecting your assets from lawsuits, estate planning, and charitable gifts, just as a few examples. There’s an element of pro-activeness required here. 

7. Find a wealth management team builder

Too often, entrepreneurs attempt to build their wealth management like a wheel, making them the hub with the financial adviser, estate attorney, CPA, corporate attorney, and insurance specialists as the spokes. The biggest issue with this configuration is that you might be great at running your business, but possibly not as good at finding the right professionals and managing your team. 

If your CPA rarely talks to your estate attorney, or your insurance specialist never talks to your financial adviser, then you’ll undoubtedly have holes in your strategy or come upon missed opportunities to build wealth. Instead, find a financial adviser with experience doing this, to be your hub. He or she is used to building teams like this, and you’ll become the axel. By rotating the axel a small degree, you’re turning the entire wheel. That translates into small planning with big results. 

8. Seek a custom experience

The goal? Avoid being plugged into a system like a cog into a machine. You’re not a widget. Maybe you make widgets, but in the financial services world, your situation is unique. There might be others with similar situations, but the best financial advisers know specifically how to customize your wealth management experience. 

Read the full article here >> https://www.entrepreneur.com/article/303492