Trusted Advisors are Needed Now More Than Ever

There’s never been anything like it most Americans’ lifetimes. The wealth millions counted on to fund their lifestyle and fulfill their hopes for the future has been severely diminished. The fears and emotional state of every client mirror the unprecedented gyrations of the financial markets.

Some are shaking off the shock and coming to terms with what the new economy holds for them. Everything from their work to their portfolios, retirement plans, financial goals and estates is up for grabs. For the first time, security seems illusive to many.

Indeed, it has all happened so quickly that it’s more than some can cope with in such a short time. Looking back over the past year, we have gone through the most violent and wrenching changes in the economy most of us will ever experience. Many have watched as their retirement plans and financial security evaporate with plunging stock and mutual fund valuations, not to mention the depressed real estate valuations. When you add in very real employment concerns and the uncertainty surrounding personal business interests, the picture appears problematic at best.

In this deeply troubling situation, what should our clients expect from us? What can we do to help to them? Whether we like it or not, the current state of the economy brings us face-to-face with what it means to be an advisor. Fortunately, we have much to offer.

While clients vary in their ability to adapt to change, the need for flexibility is more critical than ever. This is why an objective advisor can bring understanding to clients as they assess their situation and position them to consider strategies for regaining a successful outcome for financial security.

As difficult as it may be for clients to accept, we can point out what they already know but seem to forget in very good times: there is nothing permanent but change. Second-guessing is useless, blaming others is counter-productive and so is self-blame for making what, in retrospect, may have been less than prudent decisions.

Embracing change helps in identifying the steps clients need to take, along with a specific timetable for successful implementation. This also helps clients avoid further paralyzing thoughts and can lead them in developing a more positive approach to their situation. At the same time, advisors may need to lead some clients in re-evaluating their expressed needs, and refocus their goals based on today’s realities.

Clients need skilled leadership to assist them with a plan, reviewing the impact alternative strategies can have on their family and, in many instances, a business in terms of financial security. Without question, this is a demanding task, but it is what clients should expect from us if we see ourselves as trusted advisors.

The U.S. economy and the free enterprise system have always been a beacon of light around the world. Clients need to be confident that the markets and economy will ultimately be re-generated, even when there is currently sufficient turmoil to shake the foundations of even the shrewdest businessperson. On top of that, there are more than enough uncertainties in the interest markets, future tax laws and rates and inflation possibilities to contend with.

The test for both client and advisor is to embrace today’s challenges with a realization that one’s true values are affirmed during times such as these. We need to maintain a long-term view in our planning and perspective, while still thriving and accepting these challenging moments.

Moving forward, we need to resolve to check in more often than before, always bringing value to the discussion. This is a demanding task, requiring, in many cases, that we hone our skills, reeducate ourselves and pass on what we learn to our clients.

This isn’t for those in our profession who are more interested in the rewards than they are in meeting the needs of those they serve. Many long-term client relationships will disappear if we fail to deliver value at this critical time.

At the same time, long-standing relationships can be strengthened through carefully structured, worthwhile financial reviews. This is the time to evaluate the client’s needs and suggest appropriate and qualified alternatives and then implement the plan. It is also true that those clients who are dissatisfied with their current advisors will be looking for others who are willing to take the time to demonstrate a professional and caring approach.

Positive thinking, embracing change, continuous action, displaying one’s competency and accepting the challenge of performing as expected are all critical to success. As always, wonderful things can and will happen to advisors who take their responsibilities seriously.

Allan Gersten (agersten@faiu.com) is chairman of First American Insurance Underwriters, a brokerage firm based in Needham, Mass.