Getting Clients to Think Like High Net Worth Investors

The majority of people will never amass enough wealth to be considered high net worth individuals. But there are some lessons to be learned from such affluent investors, which prudent advisors can pass along to their clients. It can be a struggle to keep clients engaged in their investment management strategies. But it can often be the case sharing stories about well-known individuals who have successfully amassed assets will assist in the building of relationships between advisors and clients.

Many people will find inspiration, and perhaps even make more effort to educate themselves, when they hear about what successful investors are buying and selling, what those successful investors are paying attention to in the markets and the wealth management strategies they’re interested in. Engaging clients in this fashion can benefit both clients and advisors by allowing the advisor valuable insight into the client’s future goals and while the client can gain knowledge which they may have not otherwise been aware.

There are a few things that a financial advisor can encourage clients to do to help adopt some of the helpful traits employed by high net worth individuals.

1) Shift focus to financial objectives, not money

It is common for clients to put the focus on their statement bottom lines and for their financial advisor to mirror that back so that all anyone ever focuses on is the bottom line. Effective, prudent financial advising requires focus by both advisor and client to zero in on the client’s values, their financial goals, and objectives rather than strictly on account values.

2) Regularly Audit Portfolios for Fees

This is an area where financial advisors can add quite a lot of value. Regularly auditing a client’s portfolio while meeting with them allows the clients to scrutinize any inherited assets and investment products that may have changed since initially purchased. Examine all existing mutual fund wrap programs and suggest similar portfolio structures that may help strip out fees, especially those of strategic mutual funds.

3) Put emphasis on creating tax-efficient wealth for clients

Another way to build a successful relationship with clients and add value to your advisory services is to assist them with the creation of a portfolio that offers favorable returns with the lowest tax rates. Municipal bonds, growth stocks, Roth IRAs, and tax-exempt mutual funds might be the most advantageous asset classes for those seeking tax-efficient investment strategies.

4) Develop multiple income streams

High net worth individuals rarely rely on a single income stream. These individuals often have multiple income streams to drive growth of wealth and minimize risk. This is another way clients can change their thinking. Finding additional income streams might sound daunting, but it is not always the case. Creative secondary income streams can include reselling estate sale finds on eBay, selling crafts on Etsy or offering music lessons, each of which can be a viable income stream that brings in extra income and reduces reliance on a primary income stream. Brainstorming with clients to uncover hidden talents or passions, which could diversify income and improve their financial outlook, both today and tomorrow.

Net worth individuals have many traits that can be emulated by the average person for their benefit. Working on securing objectives, rather than just a bottom line, is essential to making sure clients alter their current train of thought. It becomes far easier to convince someone to look at the bigger picture when the end-goal is attainable, not just a number that can seem so far away. Once focus is shifted to objectives, working to reduce fees and taxes along with increasing the number of income streams available become much easier. These are a few among the many ways for the average person to successfully plan their futures, with their prudent financial advisor assisting all along the way.

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