The information presented in this article is not intended to be a solicitation to buy or sell or to participate in any investment strategy. It should not be used as a substitute for individualized investment advice. Mr. Hoesly is an investment adviser representative with Resource 1 Inc. and a registered representative with Ceros Financial Services Inc., Member FINRA/SIPC. Resource 1 and Ceros are not affiliated. The views expressed in this piece are his alone.

Have you ever been working with a client and felt like you care more about their finances than they do? It’s frustrating because no matter how much you educate them, sometimes they choose the wrong path. One of my first experiences with this was with a partner at a law firm who was diagnosed with terminal cancer. We had done a lot of insurance and investment planning, and he always made it seem like everything else was set, so we never pushed to see his estate planning documents.

The client died at age 55 without a will, and his widow moved the account — I think it’s because she thought we had missed that detail in our planning. Financial advisors see this kind of scenario more frequently than we would like, so I try to make it easy for clients to take my advice with examples about how they could be hurting themselves or their family if they don’t listen. Here are a few you can share with yours.

Trusted contacts

One situation we’re seeing more often is determining whether an elderly client has the mental capacity to make financial decisions. That’s why a trusted contact is essential. It authorizes us to contact someone — often their child — if we think the client is having problems. This also helps open a conversation about who they trust with their financial decisions.

Policy pitfalls

I work with a lot of company retirement plans, and it’s important to make sure their policies make sense. It brings to mind a case we saw where the company shredded employees’ files seven years after they no longer worked there. Many former employees, however, leave their money in the company plan after retirement, and the beneficiary forms are kept in their personnel files. In one case, a former employee who still had money in the plan died but hadn’t worked there for more than 20 years. Luckily, there was only one beneficiary, but this could have turned out badly.

The diversification conversation

I have always been big on diversification and not just the mix of stocks and bonds that people invest in, but also the tax and investment strategies, products and companies I use. Many insurance products and investment strategies perform well at certain points in a market cycle, but rarely does one thing consistently work the best every single time. By having these investments diversified, we empower clients to choose the strategy that works the best.

Financial organization

It’s not uncommon to have a client who operates as the sole person handling their family finances. That’s why we created our own pages to help with the bill pay schedule, financial information and important document checklist. It helps organize what they pay at various intervals each year. I have a client who is the sole beneficiary of his brother’s estate, and almost a year from the date of death, he is still discovering his brother’s financial assets.

That’s why the financial information page is critical. Make sure the beneficiary knows to call you if this list changes. We include our company name and contact information on top of all of these pages, so beneficiaries know we’re there to help.

Matthew Hoesly is a 13-year MDRT member from Norfolk, Virginia, USA. Contact him at matt@r1advisor.com. 

View Hoesly’s presentation from the 2020 MDRT Annual Meeting and Global Conference Virtual Event at mdrt.org.