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What Do Clients Worry About?


Many of us are worriers. TV news is no help. If you turn on the morning news, it’s as if they are saying: “If you think things are going well, guess again.” As of Friday, May 20, the stock market was down for seven weeks. TV news will not let that slip by unnoticed. What do clients worry about?

What Do Clients Worry About?

They worry about plenty of things, but most of these will be financial in nature.

1. They worry the stock market will keep going down and their savings will vaporize. Years ago, in a down market, I heard an advisor relate a story about a client remarking on the firm’s new technology. “These new statements are so great; I now know exactly when my investments decline to zero!” 

Advisors add value: If the client uses mutual funds or money managers, someone else is “driving the bus.” On really scary days, they often get confirmations telling them what their manager has bought when everyone is selling.

2. They worry their financial advisor does not share their concern. They see their advisor as a friendly croupier in a casino. You exchange pleasantries while playing blackjack, but when you run out of money and leave the table, they will be equally cordial to the next player who takes your seat.

Advisors add value: You keep in touch. You know about their goals and objectives. You help keep them focused on the long term. You try to spot the light at the end of the tunnel and show them.

3. They worry they will run out of money in retirement. Even comparatively wealthy people have this concern. They think the stock market will underperform, inflation will drive up the cost of living and they will get squeezed.

Advisors add value: You have retirement planning tools that can show “what if” scenarios. These tools often assign probabilities. You meet with retired clients to review their spending and compare it to their income projections.

4. They worry their favorite alternative investment might be a scam. They listen to late night TV. They might have bought gold coins from a number on the screen. They might have bought rare earths from a cold caller.

Advisors add value: You often talk about the client’s portfolio as similar to their main course when having dinner in a restaurant. The U.S. equity markets are the main course they ordered. Other asset classes and alternative investments are the potatoes, vegetables, condiments and sauces. They each represent a smaller quantity relative to the steak or fish on their plate. If an alternative investment runs into a problem, there is “trouble in the vegetables.” It represents only a small part of the client’s financial picture.

5. They worry inflation will go unchecked. They either remember the high interest rates of the 1980s or have a parent who told them about 16% mortgage rates. They think prices will go up forever.

Advisors add value: There are investments that benefit when inflation is increasing. Your client should be able to capture higher returns by buying bonds at different times. Interest rates run in cycles. The Federal Reserve takes active steps to bring inflation under control.

6. They worry health insurance will become unaffordable. Premium increases have historically exceeded inflation. This is one spending category cannot eliminate entirely.

Advisors add value: Once your client reaches age 65, they should qualify for Medicare. Now they will be paying for supplemental insurance, lowering their costs. Before age 65, advisors can either help clients shop for health insurance or direct them to a specialist who can help.

7. They worry they will be paying more in taxes. This will likely happen. The Federal government gave lots of aid to people during the pandemic lockdown. They will want to get it back. The tax code is constantly changing.

Advisors add value: In this case, it is accountants who add value. Your client either has a good accountant or needs to find one. As their advisor, you can help. Ideally both the accountant and the advisor work in tandem to help the client.

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