Reinforce Your Value with the Re-Proposal

Often, wealth managers may think portfolio proposals are a one-time process, especially when the initial proposal leads to gaining a new client. However, after the initial success, the investment proposal shouldn’t just be archived away to never be seen again. Instead, investment proposals should be reviewed and re-evaluated on a regular basis, in a process that can help retain existing clients, build lasting relationships, and reinforce the advisor’s value.

Chris Volpe, Director of Zephyr, who has been at the forefront in helping financial advisors understand the importance of ongoing reviews of the original proposal says, “As part of providing any service, reviewing progress is necessary to ensure financial advisors are meeting a client’s goals and they are on track. ‘Re-proposal’ is different. It’s the idea that you can continually reinforce the value that you bring to the relationship, by quickly and easily showing that a client’s investments are not just hitting the initial goal, but that the strategy is constantly being reviewed and optimized. Even if that means showing that the existing portfolio is still the best option!”

Life is Not Static, Neither Should the Proposal 

How often do you review the initial portfolio proposal or conduct a re-proposal?

As you’d expect, as your clients advance through their investment journey, their objectives also naturally change. At the outset of the relationship, one of your client’s objectives may have been to pay for their child’s college education. Once the goal is achieved it’s time to focus on the next, which should kickstart a review of the initial proposal, or a “re-proposal”. On this basis, some advisors may review the appropriateness of the proposal at this juncture or even annually and believe this should be sufficient. But should the review process happen more often than when a goal is accomplished, or simply once a year?

Your client’s investment journey may not be linear or predictable and is likely to be fluid depending on their financial situation and how their life evolves. This fluidity means it is important for advisors to stay abreast of their client’s life changes, as well as the market, and continue to tend to any changing needs as they arise. Consider whether a more regular review would benefit your clients and bring the strategy back on track to meet new goals and expectations.

We also know financial markets move quicker than ever and as a result the chance for a spike in volatility or a steep market selloff has increased. The Great Financial Crisis and COVID-19 bear markets are great examples of how quickly markets can collapse. A crisis or deep market correction can rattle investor confidence and, in a lot of cases, make them rethink their investment objectives and risk tolerance. It’s unlikely a client will become risk averse while markets are breaking records and trending up, up, and up, however, their mindset can shift quickly following a market selloff. Managing your client’s emotions and decision-making during periods of heightened market volatility and uncertainty can be one of the biggest challenges for financial advisors.

It's clear there are a number of circumstances that could trigger a potential re-proposal. But what is there to gain?

Challenges Present Opportunities

Market volatility and changing client circumstances can create anxious and ill-informed clients. These types are among the first to question the day-to-day management of their investment portfolios, and even begin to shop around for new advisors. And while this can pose a challenge to financial advisor, it also presents a great opportunity to showcase value through increased communication and a “re-proposal” to determine if the initial proposed investment proposal is still appropriate today. Taking this step can re-instill client confidence, strengthen relationships and ultimately turn around a shaky client into an advocate of the strategy being implemented.

During periods of market volatility, advisors should be asking themselves: how can we assure clients that we have their best interests at heart and are providing value they cannot get elsewhere? And when a client’s situation has changed, we should ask: how can we best navigate these conditions and still come out meeting the objectives?

Reinforcing your value through a “re-proposal” during times of uncertainty can turn the challenge into an opportunity – and the power of this shouldn’t be overlooked.

Capitalize on the Opportunity with Technology

Leveraging a comprehensive wealth management platform like Zephyr can help meet the demand and concerns from clients and help financial advisors capitalize on the re-proposal opportunities as they arise. Technology clearly plays an important role in the “re-proposal” process, and Volpe adds, “Advisors should regard each client meeting as an opportunity to “re-propose” and re-sell themselves. It’s critical to look at each meeting with the same amount of time and effort that was invested during the initial proposal which earned the client’s business. When used correctly, technology can make this an efficient process. Advisors should be properly equipped to engage clients quickly so they can build trust and showcase their value transparently. Advisors must arm themselves with a fintech platform that provides timely, quality data and robust analytics along with reporting and research capabilities to gain such an advantage. While painting a clear picture of the benefits of a particular tax strategy or the impact an allocation change might have on a portfolio is vital, these tools should also empower advisors to keep tabs on their clients as well as open new doors for emotional and financial engagement.”

But don’t forget, clients also demand human interaction, and a level of personalization. Personalized client communication and human touch points during times of heightened market volatility or change showcases compassion towards your client’s situation.

Through a “best of both worlds” blend of human interaction and technology, advisors can gain a holistic understanding of the client’s investment scenarios, while highlighting progress toward their objectives or how to adjust the initial proposal if needed, all while customizing communication and information to suit each client’s needs and expectations.

Financial markets move quicker than ever, and client’s lives, and financial circumstances don’t always follow a predicable course: both can result in a change in investment objectives and risk tolerance. The “re-proposal” process allows you track your client’s journey to help determine the appropriateness of the proposed investment proposal and reinforces your value, reminding your client why they selected your practice in the first place.

The Zephyr platform allows you to create custom portfolio proposals, demonstrate portfolio performance and run custom reports, to showcase your strengths and help meet the unique needs of clients. Find out how to make the re-proposal process efficient and effective with  Zephyr.

As Zephyr’s Market Strategist, Ryan Nauman provides analysis and research on market trends across asset classes, sectors, and regions to help empower better asset allocation strategy decisions. He is an accomplished investment strategist who has spent the last 22 years in the investment management industry ranging from working with plan sponsors, managing the investments of retail investors, and providing actionable thought leadership to investment professionals.  

Nauman is the host of the popular A to Zephyr and Adjusted for Risk podcasts. He is a well-respected investment industry strategist regularly featured on TD Ameritrade Network, Yahoo! Finance, Bloomberg TV, Bloomberg Radio and Chuck Jaffe’s Money Life podcast. His opinions and market expertise have been published in Reuters, CNBC, Bloomberg, MarketWatch.com, Yahoo! Finance, and the Wall Street Journal.