How to Steer Your Clients in the Right Direction

Estate planning provides your clients with a wealth of opportunities to strategically grow their net worth while also planning for their families’ future comfort and security. Opportunity brings risk, but also the potential reward of deeper, longer-lasting client relationships.

Educational Topics for Your Clients That Can Help Your Business
What you don’t know can end up hurting your clients, and in turn, limit your ability to secure future business opportunities and retain assets under management. That’s why it’s important to learn about and discuss the potential estate planning risks faced by your clients.

When you discuss the value of estate planning and these hidden risks with your clients, you strengthen your professional relationships, build long-lasting trust, and help clients maximize their financial well-being.

Risk 1: Sub-Optimal Insurance Products

• Problem: Busy clients can put insurance product comparison efforts on the back burner and end up paying for it over time. If your clients’ premiums are higher than they need to be, it creates a financial burden — which can increase the potential for policy lapse.

• Solution: Comprehensive planning minimizes resource loss caused by inefficiencies. Review your clients’ insurance products and see how long it’s been since they’ve explored better options. Coordinate with us, as estate planners, to ensure that all policies have the proper beneficiary designations for the clients’ goals.

Risk 2: Earned Income in Retirement

• Problem: If your clients are part of a growing trend of retired individuals continuing to work and earn income, they’re also opening themselves up to greater tax exposure in the process.

• Solution: It’s necessary to do a risk management assessment of what they’re earning, how it’s being taxed, and how we can strategize as a team to keep taxation on those income sources as low as possible.

Risk 3: Obsolete Estate Planning

• Problem: Clients’ families may be in for an unpleasant surprise if the clients don’t have up-to-date wills and trusts. Outdated wills and trusts can lead to administrative inefficiencies, unnecessary probate, costs, and taxes, and, eventually, an exodus of assets from management when the process is complete.

• Solution: Discuss your clients’ wills and trusts to open up a line of conversation about whether their current plan aligns with their goals and vision. An easy starting point is a quick review of the plan summary or diagram. If there’s any doubt about whether the plan will work as the client intends, an in-depth professional review is a great idea. We are always happy to review plans and recommend improvements for your clients.

Risk 4: Chronic Illness, Poor Family Health Histories, or Both

• Problem: Clients who are suffering from chronic health issues won’t be helped by burying their heads in the sand when it comes to financial and estate planning. If they fail to act fast, they can quickly drain their wealth through medical costs.

• Solution: With a long-term care funding plan, your clients dealing with chronic health issues can find comfort in the knowledge that their resources are being allocated wisely and that there’s less of a chance of their families being burdened in the future.

Risk 5: Life Insurance with Substantial Cash Value

• Problem: Life insurance policies with significant cash values aren’t always the most effective route to take when other investment vehicles could provide for better growth.

• Solution: We can work with you to help your clients monetize their life insurance policies to support their income needs with improved tax efficiency. By taking advantage of tax-deferred growth, tax-free dividends, or policy loans in ways that align with the clients’ long-term financial and estate planning goals, we can help ensure your clients are getting the most out of their life insurance policies.

Your clients may be in danger of experiencing the consequences of these risks without even being aware of them. Often, changes that lead to these types of risk take place so gradually that your clients haven’t considered them. Presenting these hidden risks can also help you cement your relationship with your clients and possibly win referrals and new business.

As you discuss these risks with your existing and potential clients, please be in touch if there’s anything we can do to help.