Would You Want Your Advisor to Outlive You?

Advisors are often challenged to articulate their value.  What do you bring to the relationship?  A financial advisor in Singapore told me about this question.  It’s brilliant!  The rationale behind the answer (yes) defines the advisor’s value.

Six Reasons You Want Your Advisor to Live Longer

Here are six ways advisors help clients beyond executing trades and monitoring performance.  Lets assume the client had significant assets.

1. Providing continuity for the surviving spouse. 

In some relationships, one partner handles bill paying and investments.  They may (or may not) manage money well.  The surviving spouse might have good skills, but budgeting and executing the financial plan might not be their strength.  They may be grieving.

Good advisors:  You can help get securities retitled.  You can see they have adequate income to pay bills plus a cash reserve.  You can teach them how the other partner managed money.

2. Knowing “where the money is” for estate settlement. 

This seems pretty obvious because investments should leave a paper trail because of tax reporting.  We now live in a world involving cryptocurrencies and online accounts.  Lets nor forget the old standby, gold in physical form.  I had a former client who cashed out of securities, then later died.  The heirs had no idea where the money went.

Good advisors:  You have these conversations with your client.  They should keep a notebook listing online accounts and passwords.  Details on safety deposit boxes and where they store hard assets.  You can help them assemble this record.  You will know things anecdotally.

3. Collecting death benefits on life insurance. 

Fortunately, your client carried adequate insurance.  How many policies did they own?  Are they paid up to date?  What documentation is necessary for collecting from the insurance company?  How should the money best be put to use?

Good advisors:  You can act as their intermediary with the insurance companies.

4. Seeing heirs understand what they are getting. 

Your client bough certain stocks with a long term view.  They saw great things happening.  “This e-commerce thing could really catch on” or “Someday we may all be riding in self driving cars.”  The technology might be in it’s infancy.  Suppose the heirs want to simply cash in?

Good advisors:  You can explain to the heirs why your client bought these stocks and what they hoped would happen years from now.  Once they know the full story, the heirs can decide to sit tight or cash out.

5. Helping administer the donor advised fund. 

Your client has established a charitable vehicle that can outlive them.  Once your client dies, the DAF may have successor advisors, the family members now deciding which charities should receive donations.

Good advisors:  You know why your client setup this account and the causes that were important to them.

6. Advising on estate planning. 

The government works on a “pay me now or pay me later” line of thinking.  Surviving spouses might inherit the bulk of the deceased client’s financial assets, but once they pass away, the government will want their share.  Most people want to minimize the tax bite as much as possible.

Good advisors:  You can help the surviving spouse with estate planning.  This will likely require bringing in additional experts.

There are many reasons why clients would want you around when they are no longer in the picture.  These reasons articulate your value.

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