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Measuring the Value of a Financial Advisor

Mark Smith, CFP®, CPA/PFS, CIMA® - Thursday, July 6, 2017

Value of a Financial Advisor | M.J. Smith & AssociatesEvery time you turn around, it seems someone is sending you a survey. How did you like your recent purchase? How likely are you to recommend our restaurant to a friend? Did our service meet your expectations?

Responsible business owners want as much feedback as their customers are willing to give, because it has a direct effect on how they operate and interact with customers in the future. However, in this busy day and age, it may seem exhausting to field survey requests after every transaction. That’s why I’d like to thank all of our clients who recently completed our survey to measure your satisfaction with M.J. Smith & Associates. Our overall response rate was 38%, which was fantastic compared to average rates for external surveys of around 10-15%.

Within the financial services sector, advisors spend a lot of time thinking and talking about how best to add value to their clients’ lives. At every conference, you’ll hear someone speaking about the “value proposition” advisors bring to the table. For investment advice, it’s relatively clear-cut – either clients receive a good return on investment, or they don’t. But what about for long-term services like financial planning? Often, advisors have a difficult time articulating (and/or clients have difficulty understanding) the value of a financial planning relationship. 

In 2015, financial blogger Michael Kitces explored the issue with Mitch Anthony, president of Advisor Insights and the Financial Life Planning Institute. Anthony, who spoke at the AICPA Personal Financial Planning conference that year, framed the value of financial planning in terms of “return on life,” as opposed to investment. In the Kitces article, Anthony describes six key value propositions that help to improve a client’s return on life: organization, accountability, objectivity, proactivity, education, and partnership. Kitces compared these value propositions to what most advisors articulate on their websites: “We provide a customized, individualized, personal financial plan!” Which is clearer for you?

We realize that many of our clients only see us once a year. So, how do you know what we’re doing the rest of the time? You may be surprised to know that we’re constantly working on your behalf and in your best interests. While you may receive newsletters from us, see our blog and social media posts, or attend one of our education seminars, there’s plenty you don’t see, including monitoring and analyzing your investments, helping you design your portfolio and estate plan, testing your retirement forecast to make sure it’s accurate, rebalancing, coaching you on your financial plan, and working with other professionals to ensure we’re helping to give you the best “return on life” possible.

To communicate our value to you, we’ve designed a short handout that explains exactly what you see and don’t see when you work with M.J. Smith & Associates. As the world of financial advice becomes more and more commoditized (and in some cases, robotic), we believe strongly that great value still exists in the ability for a client to rely on a trusted advisor for guidance, an accurate understanding of the person’s unique financial situation, and advocacy for the client’s best interests to be served.

I encourage you to download “How We Work with You,” and contact us with any questions you may have. We’re happy to discuss the value proposition we bring to our clients. If you work with a different advisor and are considering a change, ask yourself how your current advisor compares, and schedule a complimentary, no-obligation portfolio review with us. We are committed to making a difference in the lives of our clients, and appreciate the privilege to serve you.

 

 

Raymond James is not affiliated with Michael Kitces, Mitch Anthony or the organizations these individuals represent. Working with a financial professional does not guarantee a favorable outcome.

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