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Maximize ROI through strong relationships.

1 min read
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TLDR:

Advisors can add about 3% annually to clients’ net returns by following a behavioral finance approach. Four key ways to achieve this include limiting leakage, asset location, tax efficient drawdown, and leveraging behavioral coaching. Emotional trust is the most important attribute for clients when it comes to financial advice. By fostering a strong relationship with clients, advisors can help them navigate market downturns and avoid costly moves, ultimately leading to a higher return on relationship.

Key Elements:

  • Advisors can add 3% annually to clients’ net returns through a behavioral finance approach.
  • Four key ways to achieve this are limiting leakage, asset location, tax efficient drawdown, and behavioral coaching.
  • Emotional trust is the most important attribute for clients in financial advice.
  • Strong relationships with clients can help them navigate market downturns and avoid costly moves, resulting in a higher return on relationship.

The article discusses the importance of advisors following a behavioral finance approach in order to add value to their clients’ investments. By focusing on limiting leakage, optimizing asset location, implementing tax efficient drawdown strategies, and providing behavioral coaching, advisors can help clients achieve better returns. Emotional trust emerges as a critical element in financial advice, as clients value this attribute above ethical and functional trust. Building strong relationships with clients can help them navigate market volatility and make sound financial decisions, leading to a higher return on relationship.


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