Financial Advisors:

Protect Your Clients and Grow Their Portfolios

Winning new clients is tough, keeping them is tougher.

That’s where SmartStops can give you a significant advantage. Our intelligent risk alerting system continuously monitors portfolios for you, sending you immediate, pertinent data when it matters – timely information  and recommendations you can share with your clients to demonstrate that “you have their back.”  Provide the proactive, responsive, and clear direction that we know clients find highly valuable … to better protect and grow their money.

Client satisfaction and retention are key to success for financial advisors. According to a study conducted by The Spectrem Group, two of the most highly cited reasons that investors worth between $1 million and $5 million leave their financial advisors are communication and service related:

  • not proactively reaching out (53%)
  • not providing good ideas and advice (48%)

And for winning new clients, opportunities do exist with self-directed investors. More than two-thirds of the affluent investor market have either an intermittent relationship with an advisor or no advisor relationship at all. And don’t assume that just because these investors don’t consistently work with an advisor that they’d necessarily be difficult to gain as clients. When asked to select reasons for not using an advisor, only 52% of millionaire respondents chose “I can do a better job of investing than a professional.” Nearly as many (48%) said:

“I don’t believe an advisor would look out
for my best interests.”

Financial Advisors Need Better Portfolio Protection Tools

Today’s affluent investors want their financial advisors to be using the latest technological innovations to help protect their families investments. Advisors who fail to communicate insightful, data-driven advice to their clients and neglect to proactively guide them toward the right solutions are putting their own client satisfaction and retention rates at risk.

It is with data-driven tools in the form of active risk analytics provided by SmartStops that a goldmine of opportunity lies for the advisor to improve the foresight, advice and communication they are providing:

  • Put a full-time safety net system in place for your clients to monitor and preserve wealth.
  • Receive valuable data and alerts that you can proactively share with clients.
  • Provide timely ideas and advice to clients when their portfolio risk increases.
  • Offer better protection (and growth potential) than diversification and allocation alone.
  • Attract new clients with proven investment tools built on intelligent data analytics.

Clients Want Timely, Clear Responses to Market Events

Learn More »

“When (advisors) ask clients what’s more important, preserving current wealth or generating alpha, the answer clients give the most is preserving wealth.”

– Source: Cerelli Associates

DIY’ers getting discouraged:
According to a recent Charles Schwab survey, advisors were opening 25% more in new accounts for former DIY’ers.

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Clients Want Timely, Clear Responses to Market Events

According to a recent study by the Oechsli Institute the biggest concern of high net worth clients was the lack of timely responses to market events and ensuing communications. The study found that clients with $250,000 to $10 million in investments are more concerned with receiving clear, timely communication than with investment performance.

“If you’re uncertain as to whether there will be a correction in the market –or if you think there’s no reason to worry because ‘it’s different this time’ – you have to read this book (Mastering the Market Cycle by Howard Marks) before you make a move.”

— Carl C. Icahn, Chairman, Icahn Enterprise

Market volatility should be a stark reminder to financial advisors of how vital it is to have a defined communications plan

Investors Now View Risk Differently

As reported in Deloitte’s Top 10 Disruptive Trends Affecting Wealth Management:

“The re-wired Investor has come to view risk through a different lens – she/he perceives risk as downside, rather than volatility. As a result, advisors have had to emphasize capital markets and hedging strategies that seek downside protection more than traditional portfolio allocations that seek to manage risk through diversification”

Advisors can no longer let decades of hard-earned savings and diligent investing be significantly impacted with downturns that are much more volatile and frequent in our 21st century markets.

Plus downturns can have significant impact to the longevity of an investor’s portfolio, especially for someone approaching retirement or retired. Temporary market dips can damage long-term portfolio performance given the opportunity cost in recovery time. Plus, in the asymmetry of losses (the fact that a loss requires a higher subsequent gain to make up the lost ground), short-term losses can damage portfolios for years.

Buy and Hold vs Risk Managment

Clients expect their trusted advisors to be keeping an eye on their portfolio and they appreciate any contact that shows that their wealth is being protected. Advisors need next-gen tools to build a safety net for their clients portfolios. Our Smart(R ) risk analytics can help equip financial advisors with an unbiased, constantly adjusting, “intelligent” framework to react to risk appropriately in a timely fashion and strengthen communications with clients. SmartStops financial advisors surveyed have indicated increased client satisfaction with a feeling that someone is “watching their back.”

Myth: Just Use Diversification and Allocation Rules

Traditionally risk is managed by diversifying across different asset classes, but the problem is that diversification alone is not enough.

It’s not that broad diversification can’t help with downturns. It does, but to a limited degree. We know for a fact historically that asset class correlations are not stable over time; they periodically increase sharply and without warning. Diversified portfolios don’t protect against increases in volatility. In fact, during times of heightened market volatility, most asset classes tend to decline in unison as correlations rise. The diversification investors thought they had quickly disappears.

In addition, diversification cannot protect against unfortunate timing and unforeseen events. But advisors can help clients reduce the impact of these events on portfolios. Decades of hard-earned savings and diligent investing are at risk. Temporary market dips can damage long-term portfolio performance given the opportunity cost facing in the time of recovery.

Preserve Wealth AND Increase Portfolio Performance

The opportunity is ready and waiting for the smart financial advisor – one who can demonstrate their expertise by adding value for struggling and novice investors. Knowledge is key. Knowing when and how to control downside risk becomes an advisor’s differentiator. By educating clients on risk and showing them how it can be controlled, advisors can build trust and give clients confidence in the markets as well as building that long-term bond of loyalty.

An Intelligent Safety Net = Happier Clients

Provide the proactive, responsive, and clear data and direction that we know clients find highly valuable … to better protect and grow their money.

Let SmartStops help you protect and serve your clients better.

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