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You've heard it before, eat right, exercise, get regular checkups. And you know that to be healthier, you should do those things. But what if there was a regulation that said you must do those things? The Department of Labor Fiduciary Rule underscores the importance of understanding your clients' personal and financial retirement objectives and building a portfolio based on that shared understanding.

As ERISA fiduciaries, advisors will need to demonstrate the value of the services they offer for the fees they charge. And it starts with meaningful personal relationships and a deep understanding of the client's circumstance, because these circumstances are what drive their financial objectives.

When you look deeper, spend the extra time with clients, when you help them make better saving, spending, and investing decisions, you solidify your client relationships, make them clients for life, and demonstrate the value of the fees you charge. Research for Morningstar shows that investors who make intelligent financial planning decisions achieve better outcomes. They call it Portfolio Gamma.

And as a fiduciary, working to deeply understand client objectives and regularly affirming those objectives may be the most important thing you do with clients. This is where you can add significant value or gamma to the client relationship. Consider a process where you start by understanding the future purpose of the client's money. Why are they invested? How much do they need? And in what timeframe?

Then assess different actions a client may need to take over time in order to achieve their desired goals. Do they need to work longer, spend less, or modify how they're investing? You and your client need to know their current cash flow to help determine how much or how much more they can save and invest.

And if retirement is the primary goal, understanding future cash flow can be just as important. Part of complying with the Department of Labor's new regulation is having a documented process that's transparent to help address each client objective. If your firm has a form for this, please use it. However, if not, BlackRock has resources to guide you through your process, including several worksheets that you can access here.

To help you demonstrate your value proposition, add Gamma to your client relationships and meet your obligations as a fiduciary. And eating right and exercise, that's still a good idea, just not part of the fiduciary role.

[MUSIC PLAYING]

 

You've heard it before, eat right, exercise, get regular checkups. And you know that to be healthier, you should do those things. But what if there was a regulation that said you must do those things? The Department of Labor Fiduciary Rule underscores the importance of understanding your clients' personal and financial retirement objectives and building a portfolio based on that shared understanding.

As ERISA fiduciaries, advisors will need to demonstrate the value of the services they offer for the fees they charge. And it starts with meaningful personal relationships and a deep understanding of the client's circumstance, because these circumstances are what drive their financial objectives.

When you look deeper, spend the extra time with clients, when you help them make better saving, spending, and investing decisions, you solidify your client relationships, make them clients for life, and demonstrate the value of the fees you charge. Research for Morningstar shows that investors who make intelligent financial planning decisions achieve better outcomes. They call it Portfolio Gamma.

And as a fiduciary, working to deeply understand client objectives and regularly affirming those objectives may be the most important thing you do with clients. This is where you can add significant value or gamma to the client relationship. Consider a process where you start by understanding the future purpose of the client's money. Why are they invested? How much do they need? And in what timeframe?

Then assess different actions a client may need to take over time in order to achieve their desired goals. Do they need to work longer, spend less, or modify how they're investing? You and your client need to know their current cash flow to help determine how much or how much more they can save and invest.

And if retirement is the primary goal, understanding future cash flow can be just as important. Part of complying with the Department of Labor's new regulation is having a documented process that's transparent to help address each client objective. If your firm has a form for this, please use it. However, if not, BlackRock has resources to guide you through your process, including several worksheets that you can access here.

To help you demonstrate your value proposition, add Gamma to your client relationships and meet your obligations as a fiduciary. And eating right and exercise, that's still a good idea, just not part of the fiduciary role.