The Covisum Tech Stack: Talking to Clients About the Value You Add

Katie Godbout, Director of Sales & Marketing
December 17, 2018
     

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Here are some talking points that will help you discuss the value you can add for clients when you use the Covisum tech stack

 
Advisors ask us all the time, "How do I use your software to help me attract new clients?" And we've written extensively about marketing best practices. The guides, templates, and checklists we've created for you are helpful, but what do you do with all of it? How do you transition from strategy to execution? And how do you ensure that what you are communicating to your clients aligns with the benefits you provide?
If you are using these three tools, Tax Clarity, Social Security Timing, and SmartRisk, here are some suggestions that you can work into your communication materials and conversations with prospects and clients as you grow your financial planning practice. Each tool has a seminar presentation that you are licensed do use as a paying subscriber. Many advisors use these seminars as a marketing tactic to attract prospective clients and create awareness about the services they provide. From there, a percentage of the attendees typically schedule an appointment with the advisor. When someone schedules an appointment, you should follow up and send them a list of their financial information to bring to your first meeting. When they get there, ask, "What brought you in today?" Now, use the Covisum tech stack to help address your new client's financial concerns.  
 

Social Security Benefit Planning

Many people think that taking Social Security as early as possible is the right choice. As an advisor using Social Security Timing, I can help you optimize your benefit strategy and potentially increase your retirement value. This tool has added $100,000 to some people's retirement plans. Your Social Security Timing report will provide: 

  • Actionable reporting 
  • Social Security strategy comparison  
  • Break-even chart to see which strategy produces the best result over all life expectancy combinations 

Many clients seek the help of a financial advisor before they finalize their Social Security decisions. When you have a new client or prospect in your office to discuss their Social Security benefit, use Social Security Timing to pull up a sample case and show them that it's not uncommon to find $50,000 to $100,000 in added benefit by optimizing their strategy. Next, you can show your clients their customized break-even chart. This calculation maps out the benefit amount if your client dies every year between the ages of 70 and 100 and identifies which strategy would have worked best at every combination of death ages. This report helps clients feel more comfortable about the impact of an unexpected, early death on their Social Security withdrawal decision. 

When you do a Social Security analysis, oftentimes, you will recommend to delay a claiming their benefit, and that impacts their cash flow and how they are going to spend from their portfolio. Your clients will need to use money from another source during the period that they are delaying. This creates a natural transition into a conversation about an overall financial plan and the value you can add by providing advice on all of your client's assets. 

From here, you can transition into using your overall financial planning software and show the client that you are going to address some of their other retirement concerns, like the typical worries about a down market, early death, or long-term care event.

Taxes in Retirement

As a consumer, it can be hard to understand interactions between different types of income and deductions, leading to potentially significant tax inefficiency in your retirement strategy. As an advisor armed with Tax Clarity software, you can quickly identify sub-optimal situations, showing clients how to make retirement decisions in the most tax-efficient way. Your Tax Clarity report will provide you with:
 
  • Landscape view of tax
  • Your client's effective marginal tax rate 
  • Actionable reporting
  • A unique Tax Map graphic that identifies tax opportunities
  • The ability to modify the data inputs to compare alternate tax distribution strategies 

How does a conversation about taxes in retirement play out? Consider this, a new client comes into your office asking for help navigating the tax impact on retirement strategy. Use your client's 1040 and enter their information into Tax Clarity. From here, you can show them their personalized Tax Map. Where they fall on the Tax Map also shows all the other places they could be. For example, you may recommend for your client to consider a Roth conversion. This will have an impact not only on this year's taxes and cash flows, but also the size of their eventual estate. Further, a client might want to invest dollars that are in a Roth more aggressively than dollars they plan on spending early in retirement. Again, this is a natural transition to an overall financial plan and a conversation about portfolio risk. 

Market Impact on Investment Portfolios

Market opportunity and risk is hard to understand, even with the most complex algorithms and computing systems. If you're not actively paying attention and using the latest industry tools, your clients could be at risk of having misaligned downside expectations – either too conservative or too reckless, leading to sub-optimal investment allocations. As an advisor with SmartRisk, you can analyze portfolio risk and easily communicate downside expectations to help your clients avoid costly mistakes. Your SmartRisk report provides:
 
  • Heavy-tail risk analytics
  • Diversification index
  • Portfolio comparison
  • Asset interaction and concentration alerts 
  • Household views of accounts  
  • Actionable reports 

SmartRisk can be beneficial in your client's financial planning because you can enter multiple accounts and show them the household exposure to a down market. Since you can show multiple accounts, you can easily show which accounts are more risky than others. This provides a natural transition back to the financial plan because the amount of risk in the account is often based on the time until you'll need to use it. This ties into the Roth example. Clients may want their Roth accounts to be more risky than accounts that they'll be using earlier in retirement in order to capitalize on greater potential gains and weather the market ups and downs over a longer period of time. 

Providing Advisor Alpha

Using any one of the Covisum software tools will help you create a natural transition to add value for your clients (and attract more clients). We've intentionally developed software that helps advisors quickly and effectively respond to the most frequently asked client questions and transition them from getting help on one topic, to providing advice on multiple topics. Bottom line: you want to gain a client and be their advisor for all of their assets. Not because it's better for you, but because it's better for them and by including Social Security Timing, Tax Clarity, and SmartRisk in your toolkit, we can help you show your clients what to do to save money. The report at the end of our process will tell you what to do - advisor alpha - and all of the tools add specific value to your client's life. You will be saving them money or getting them money, and that's how everyone wins.

Join the list of advisors who are growing their practice with the help of Covisum software and take a free trial of Social Security Timing, Tax Clarity and SmartRisk today.     

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Posted by Katie Godbout, Director of Sales & Marketing
Katie thrives on making an impact and achieving big goals. She believes that communication strategy has a major impact on business success. As a strategic communicator with a diverse background in non-profit, B2B, healthcare, and SaaS, Katie combines her expertise in strategy development, marketing and sales to spread the word about how Covisum can help advisors and institutions inform their clients of the best financial decisions.