Estimated reading time: 1 minute, 18 seconds

Morningstar says its research shows that the value of the Financial Advisor role is currently misunderstood. To help, Morningstar published an article listing three things Financial Advisors can do to help show the value they bring to their clients.

Thumbs up hand 157251 1280Here are the key topics Morningstar suggests discussing:

  1. Personalized goals-based planning. Implementing such a strategy “can increase a client’s wealth by more than 15%,” according to Morningstar. Many investors likely do not realize this. “Given the effectiveness of personalized advice, advisors should not take for granted that investors are committed to a goals-based strategy,” according to Morningstar.
  2. Behavioral coaching. The modern advisor helps clients weather market volatility and keeps them on track with their financial plan. “This service is both unique to in-person advisors and extremely effective at improving their clients’ performance. But unfortunately, it’s another attribute investors take for granted,” according to Morningstar. Advisors should begin introducing clients to the world of behavioral science to help them understand the value FAs provide. Morningstar suggested using this guide it created.
  3. De-emphasize maximizing returns. While some clients may be stuck in the days when they only went to an advisor for stock tips of investment strategies, FAs may want to “clear up the misconception” that their only role is to maximize returns. One way to do that is to provide examples of when chasing returns actually worked against an investor’s goals. “For example, a client that is three years from retirement should focus on maintaining their wealth, not taking on risk to increase return,” Morningstar writes.

Read the full article from Morningstar.

Last modified on Sunday, 26 January 2020
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