Module 1 - An Overview of Retirement Planning.docx

Always initiate a client relationship with the sole

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Always initiate a client relationship with the sole interest of finding out how you can help the prospective client solve a problem. Sometimes, they don’t even know that they have a problem! This is where you become the teacher and educate them on the benefits of retirement planning, the magic of compound interest, and the path to a higher probability of success. One mistake that many in the financial services industry make is to treat the prospective client as a “sale”. They become only a means to an end. People can typically see right through this mindset. It would turn you off if someone tried it with you, and it is one of the fastest ways to sour a potential client relationship. Focus on the person. Focus on the relationship. Help them as you would want someone to help you. Genuinely care about your clients and their needs and you will succeed in the world of personal finance.
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Once you have established a relationship, you can begin the data gathering process, which we call the fact-finding process . This looks a little different depending upon if your prospective client is an individual or a business. Whether you are dealing with an individual or a business, the logical starting point is to ascertain their goals and objectives...what are they trying to accomplish? These goals and objectives need to be stated specifically! To simply say, “I would like to have the best retirement possible” is not very quantifiable. If you aim at nothing, you will hit exactly that except by chance. That is worth saying again. If you aim at nothing, you will hit exactly that except by chance. The next step is called due diligence , which basically means that you check to see if the goal is physically attainable. You may find a scenario where a business owner wants to save a substantial sum for their own retirement using an employer-sponsored plan, but leave out their employees. After all, they only have a certain amount available to save and don’t they deserve it all since they own the company? Due diligence would reveal that this is a violation of the law and cannot be done. Back to the drawing board for this prospective client. You might find an individual who is age 57, plans to retire at 62 and has not yet started saving more than the $30,000 at their local bank. This due diligence review would also give you a window into this person's reality. The process of due diligence will help to determine if the desired plan is legal, realistic, and appropriate. It is also important to coordinate retirement planning objectives that you are working on with other financial professionals already in use by the client. I am specifically talking about any attorneys who would be familiar with legal issues and any accountants who have a handle on tax concerns. The last thing that a financial professional would want to do is to sour a blooming client relationship by recommending an action that causes unnecessary pain in another corner of the client's financial life.
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  • Spring '14

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