My friends at the Aurora Financial Group, especially Roccy DeFrancesco, clued me in on what they consider the seven deadly sins of many financial advisors. They say they have seen over the past 40 years a weakness in the advice that any advisors have given. And, here they are: Sin 1: Failing to look at the biggest asset: the house. Most of the financial advisors, Aurora says, are comfortable talking about all the rest of the clients’ assets and investments but when it comes to their mortgage, they note that their eyes glaze over. Sin 2: Failing to advise clients that they could better protect the equity in their house from litigation, natural disaster, downsizing of employment, or down turns in property values. Sin 3: Exposing themselves to possible litigation for not advising clients of all the best investments in terms of their risk tolerance and particular needs. Sin 4: Specializing in areas such as business insurance, college planning, retirement planning, health plans, business continuation, et al, without looking at the big picture for the client that requires a global review of the client’s situation. Aurora says it is vital that advisors surround themselves with people and companies that they can trust so that they can address the bigger picture for all of their clients. Sin 5: Not keeping up with and understanding all the concepts that could be a benefit to the client. Surely, the biggest concern that most clients have is adequate planning for retirement so that there are enough funds for a successful plan, but how many people have adequately planned? Clearly, not enough. Sin 6: Chasing the whale but overlooking the mainstream clients. As Aurora likes to put it, you are more likely to build a successful business on the principles of working with the masses than trying to close the china egg, which may never happen. Sin 7: Not earning the hearts of the clients to the point of getting referrals to be a simple and automatic process. Aurora points out that clients have more choices and have better business acumen that they had in the past. So, they are looking for the value added of working with someone. Keep in mind that people today are able to access more current information by use of search engines and the Internet. Accordingly, financial advisors really need to work hard and to focus on that value added concept.
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