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Cementing Relationships with a Personal Wealth Statement

Containing both a financial and a personal portion, the Personal Wealth Statement can help you identify planning or investment opportunities or concerns.

Helen Modly, 04/14/2011

Have you become complacent with long-term clients? You assume you know them well, but when was the last time you asked them about their current financial and personal information? Show them the love by creating an annual Personal Wealth Statement.

The Personal Wealth Statement
Most of your dealings with your existing clients probably revolve around the investment accounts that you manage for them. Create a Personal Wealth Statement to help them focus on the big picture of their total wealth, and not just today's market returns. This statement combines the typical net worth statement summarizing their financial assets with an update of their personal information.

The Financial Portion
There are many formats available for a net worth statement. Select one and use it as a guide to collect the information. Do not send it to the client to fill in. You want this process to add value to your relationship, and clients hate to fill out forms. The purpose of this exercise is to create a positive client touch, so you need to obtain this information through an interview process, preferably face to face.

You should have quite a bit of information about your clients already in your files, including a copy of their most recent tax return, a copy of their wills and trusts, and other information that you have collected over time. This is a good opportunity to make sure that these documents are up-to-date. Be sure to inventory them before you contact the client so that you are aware of missing information.

The Personal Portion
You will need to create a checklist of the information you want to cover in your interview. Some of the topics could include: hobbies and activities the clients are involved in, estimated retirement date, how and what the children are doing, what pets are in the home, and so forth. Parts of it can be filled in before the call, based on information you already have in your file. This will allow you to ask questions, such as "I notice that your daughter was married last year. Has she given you that grandbaby yet?"

A great client retention tool is to invite your clients to events they like. By identifying their hobbies and interests, you will know if they are good prospects to play golf, take to the theater, or participate in some other activity with you.

You also should be familiar with the important people in your clients' lives. If you know the ages of their children, you can offer to counsel them as they enter the workforce, buy a home, or have children of their own. If your clients' parents are still living, you can demonstrate your knowledge about senior living options, and perhaps have an opportunity to manage the investments of the older generation. Branching out to family members of all ages is a great way to show your concern for your clients.

At this point, you are just collecting information. Your opportunity to develop and make recommendations will follow later.

Keep the Process Simple
The process will go something like this:


  • Call or send the clients an e-mail to tell them that you are going to prepare their Personal Wealth Statement and that you wish to schedule a time to talk on the phone. Suggest that they gather some financial information regarding their other investment and savings accounts, 401(k) plans, a recent mortgage statement, and so forth prior to the phone call.

Interview phone call

  • Go through your checklist of financial assets. Have the clients estimate the value of assets that are not valued on a regular basis, such as the residence, automobiles, businesses, and the like. For clients with rental properties, you will need to know the current estimated market value of the property plus the outstanding balance on the mortgage.
  • Go through the personal information update.
  • Ask them to confirm or update the other professionals they work with, such as the attorney, accountant, and insurance agent.
  • At the end of the call, let them know that you will send them a draft report and will discuss the information at your next meeting. Try to schedule that meeting before you hang up.

Creation of Personal Wealth Statement

  • For the net worth statement, you can either use financial planning software that you have or create an Excel spreadsheet. You should include a disclaimer at the bottom of the page, noting that you used estimated fair market values, you do not take responsibility for the accuracy of the information, and that the statement should not be used to obtain credit from a lending institution. Insert "Discussion Draft" in big letters at the top of the page. The intention is to use this for planning and monitoring purposes only.
  • Attach the personal portion of the statement. This can simply be a copy of your completed checklist.

Identify Opportunities and Threats
This exercise will enable you to refresh your understanding of the client's situation, so you can identify planning or investment opportunities or concerns. This review will reinforce your value as their advisor and may even provide an opportunity to seek referrals.

You may discover that they have changed jobs and left a 401(k) behind or have been accumulating large cash balances at the bank. This may be your first clue that an inheritance is coming their way or that they have decided upon a retirement date.

If you have done retirement or cash flow planning for your clients, the updated net worth statement will allow you to monitor their progress toward reaching their goals. With the volatility in the stock market over the past several years, you may find you need to have the conversation about working longer, saving more, or making other adjustments to their lifestyle to allow them to retire comfortably.

Create a Stable of Fans
Think of this process as marketing to your existing clients. They probably won't remember what you told them about their investments, but they will remember that you took the time to catch up with their lives. When their friends complain about never hearing from their advisors, your clients will rave about your attention and concern for them. In this business, where referrals are so important, what better way to spend your time?

This article was cowritten by Sandra Atkins, CPA/PFS, a wealth advisor with Focus Wealth Management.

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