High Value, Low Cost Advisory Services

By James Carney on Wednesday, February 16th, 2011

Last week I discussed what some clients think of as ‘high value’ advisory services with an advisory firm.  One service that is not difficult to provide—yet offers high value—is fostering a relationship with a client’s children. One way to encourage such a relationship is to advise the client to establish an IRA when their child reaches his or her eighteenth birthday. With the IRA established, each year the child contributes a certain amount of money that their parent agrees to match for a predetermined number of years. The advisor then meets with the child individually once a year to review the account, discuss financial goals (saving for a car, paying for graduate school, etc.) and to create a financial plan.

The value to the primary client is significant for the following reasons:

1.      Their child will be educated in basic financial planning and investment principles (they often listen to an independent party more than to their parent).

2.      Their child will be well prepared as they enter their earning years, and will have developed a relationship with an advisor.

3.      Should the child receive any additional funds from their parents, through inheritance, or their own careers, not only will they have financial planning experience, but also a trusted advisor to assist them.

As for the advisory firm, the benefit is mutually rewarding in having strengthened a deeper client relationship in which to take a long-term view for financial planning. Based on my own personal experience with this service, I expect our family will be working with our own advisory firm for several generations to come.

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