Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives. Dan Richards

Last fall, a veteran advisor contacted his retired clients with the suggestion that they meet to discuss one simple goal – to lay out detailed monthly cash flow forecasts matching funds coming in with cash going out.  Not only did this exercise benefit those clients, he was able to leverage his efforts to triple his referrals.

The response to his outreach was way beyond this advisor’s expectations.  Clients who he’d had difficulty getting into his office suddenly made meeting him a priority.  The response afterwards was generally relief.  Even clients who had absolutely no concerns about cash flow expressed appreciation for his time and the peace of mind they felt as a result.

The good news was that most clients were fine, although there were a few cases where income didn’t cover expenses.  In those instances, he talked about the two alternatives: curtail spending or reallocate some of their portfolio into investments which threw off more income.  In one case, he agreed with a client that they would temporarily eat into capital with the proviso that they would revisit this in a year’s time.

At the end of each meeting he asked clients whether they’d felt it was time well spent.  Without exception they said it was; retired couples were especially effusive.  A number said they’d each been worrying about this but hadn’t known how to bring it up.  Another client with assets of $5 million said that he’d been uncertain as to whether he could afford to offer to cover university tuition for his three grandchildren.

After hearing clients out, this advisor mentioned that, should they have family or friends in circumstances similar to theirs who might be interested in going through a similar process, he would be happy to meet with them.  He suggested that either their friends could call his assistant to book a meeting or if his clients called her with their friends’ name and phone number, she would contact them directly.

He started getting calls right away as clients talked to friends about the experience.  He saw a particular increase in calls in early January as his clients got together with friends and family during the holiday season.

Tapping into hot buttons

Why was the response to these meetings so positive?

I’ve written in the past about the need to focus on client hot buttons.  Many people in retirement worry about their finances.  Historically, under-spending has been a bigger problem than overspending (although it remains to be seen if this continues to be the case as boomers enter retirement, with their “I want it all and I want it now” mindset).

With all the uncertainty about the economy and stock markets it’s understandable that clients worry – particularly retired clients.  The reason that this worked was that it addressed a preoccupation and concern for many retired clients, whether warranted or not.  It gave them certainty, something they love, especially those getting on in years. 

The exercise achieved two other things as well.