How Successful Financial Advisors Use the Election to Build Urgency

With the upcoming election 21 days away, there’s a great piece in the October issue of OnWallStreet, “Using the Election to Spur Clients to Prepare for the Future,” which offers a timely perspective.  Authored by John Diehl, Senior Vice President for Hartford Life Distributors, the article discusses how top-performing financial advisors can use the upcoming election to catalyze their clients to think, and act on their financial future.

Diehl begins his piece with the observation regarding how clients plan -- or don’t plan -- ahead. He points out that the complicated and busy lives that many of us lead each day, tend to crowd out and delay long-term considerations and planning.  To combat the impact of these procrastinating and potentially destructive behaviors, Diehl proposes that financial advisors use the election to actively engage clients in the critical conversations regarding their family’s financial outlook.

Here’s a particularly attention-grabbing bit of information.  In August 2012, Edward Jones sponsored a study that revealed “90 percent of Americans plan to change their investments and savings strategies in the next six month.” Really interesting! But don’t you think that the key phrase is “plan to”? How many Americans will actually follow through on this intention? Regardless, the implicit point is well taken. Savvy financial advisors can leverage this intention in their clients to inspire a meaningful, thoughtful discussion regarding the future.

Other key observations from the article:

• Market Up? Despite the uncertainty and closeness of this election outcome, election years tend to have positive returns…with the S&P 500 ending positively in 17 of the past 21 election years.

• Current Reality. Election years are a favorable time for investors to take stock of their personal “State of the Union”, by assessing where they are currently, especial in the context of where they want to go.

• Retirement Income Strategy. For investors who require, or who are planning on receiving, a retirement income stream, this is also an auspicious moment to discuss fixed income strategies…given that the Federal Funds rate will remain near zero through 2014.

• Taxes. Given that the top federal income rate has changed 37 times since 1913, it is a fool’s errand to predict what Congress will do regarding tax policy. As Diehl points out, a conversation regarding tax diversification strategy may be very appropriate.

• The Longer View. Finally, it is likely that most of your clients will live well beyond the next four years. Consequently, planning conversations with your clients should focus on the next 40 years, not the next 4.

A final thought 

Given the partisan nature of many elections, and especially this one, financial advisors will have clients with strongly held political views. Indeed, many financial advisors will have clients who hold differing political allegiances than they might hold. The challenge and opportunity for successful financial advisors will be to focus their client discussions on the planning dimension itself, without getting bogged down in the political aspects. Regardless of how the discussion unfolds, the clients will value and appreciate a thoughtful, objective focus on their financial organization and planning.

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