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Michael Zimmerman, CEPA • Stevens, PA
Regal Wealth Advisors • J.W. Cole Financial Inc.

An integral part of my career philosophy is that it is important to always seek to grow and improve oneself. Continuing education is very important to me. I have taken coursework in several areas directly related to delivering a high standard of professional knowledge in serving clients. This includes earning the designation of Certified Exit Planning Advisor and completing studies in retirement-income, legacy, and Social Security planning. I also have also worked with a variety of prominent figures and coaches in our industry, receiving training and insights that have been invaluable.

I believe that it is important to “pay it forward” and truly enjoy working with and helping to train financial advisors who are relatively new to our industry. We are always stronger in our business as a cohesive and well-educated team.

I have developed some talking points for discussions in these training sessions that focus on building a repeatable and comprehensive financial-planning process. A quick synopsis of my introductory thoughts is provided here. These would be followed in the actual training with a work session delving into how our specific planning tool works in practical terms:

We all have gone to the doctor with aches and pains and maybe major problems that are unique to us. The doctor’s job is not only to give us a quick, simple fix but to really explore the problem and solve the underlying issues. How is the doctor going to get this done? Well, a good doctor will start by asking you a series of investigative questions to get an understanding of what you’re feeling and where your pain points affect you the most. He or she then will proceed to run a series of tests to get a complete medical picture. After obtaining this information, the doctor is now able to prescribe a treatment for the problem to help you move forward and on your way to recovery.

As a financial professional, your job is very similar when it comes to solving your clients’ financial and investment concerns and needs. How can you give good advice on a product, strategy, or solution if you don’t know your client’s entire financial picture? An effective financial advisor needs a simple, clear, and concise process to plot a client’s assets, leaving no stones unturned in developing that financial picture. By obtaining a full financial profile, the tool I use is a great visual aid to show your clients where they currently sit in terms of risk allocation and tax allocation.

Like the doctor doing a physical examination with specific steps, an allocation template or matrix is an effective way for the advisor to do a financial checkup for their client. It’s a way for the advisor to identify all of their client’s assets, including investments that may not be performing well in CDs, savings accounts, or other “lazy dollars” that could be used more effectively.

After collecting information on assets such as bank accounts, CDs, brokerage accounts, retirement plans, IRAs, real estate, and life insurance, an advisor can fill in this allocation matrix to show a client an accurate map of where all of their money currently sits in terms of risk and task allocation.

The matrix helps clients understand how we see the dynamics of risk management, asset management, tax efficiency, building income streams, and the relative time horizons of their assets. What assets, for example, need to be the most liquid, what assets require a high degree of risk management, and what assets might be best for first fueling retirement income? We look across three rows and three columns. The three columns identify asset allocation for a client, looking at the categories of cash or cash equivalents, “safer” investments that are not exposed to market risk, and market-exposed investments. The three rows are labeled “taxable,” “tax deferred,” and “tax efficient.”

With this information, advisors can show clients how assets can be moved into different investment categories on the matrix to better align them with the client’s needs and goals in terms of asset and tax management. This can also serve to begin the process of estate planning.

  • Continuing education for an advisor provides a strong foundation of professional knowledge.
  • Training advisors new to the industry helps build a cohesive and well-educated team.
  • One important training task is helping new advisors build a repeatable and comprehensive financial-planning process.

Disclosure: Securities offered through J.W. Cole Financial Inc. (JWC), member FINRA/SIPC. Advisory services offered through J. W. Cole Advisors Inc. (JWCA). Regal Wealth Advisors and JWC/JWCA are unaffiliated entities.

This article first published in Proactive Advisor Magazine on October 10, 2019, Volume 24, Issue 2.

Photography by Jeremy Hess

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