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Facts Make Money

Learn how to prepare and present a complete list of your client's assets and liabilities.

By Donald Ray Haas, CLU, ChFC, CFP, MSFS

According to psychologist Carl Rogers, “the facts are friendly.” This same statement, when applied to the financial planning process, can make you money. The more you know about a client, the better you can serve him. And the more you serve, the more compensation you will receive.

If you have not allocated time in your practice to learn about each client’s investment portfolio, you may have, on purpose or inadvertently, left a lot of “money on the table” for the next advisor to earn.

Even if you do handle some investments for each client, you still could be missing a large amount of compensation by not performing a comprehensive analysis of all the client’s assets and liabilities. While there are many approaches to how you can offer and perform this service, the method is not as important as your discovery process.

A proven method
Here is how to prepare and present an organized, clear and complete listing of all your client’s assets and liabilities. First, list all assets and debts. Then prepare a summary net-worth statement. As an ongoing service, periodically update these figures and add one more statement—a history net-worth statement. You may charge a fee for this service. But even if you don’t, you will be justly rewarded for knowing the client’s complete financial situation. Be sure to keep this updated information in the client’s file for future use and presentation.

While there are many approaches to how you offer this service, the method is not as important as your discovery process.

About 20 years ago, my clients would complain, “Don, I can’t afford this or that.” Ever since I provided them with financial, cash management and investment portfolio statements, they now ask, “Don, can I afford this financial product?” I reassure them that it is my job as a professional to know everything about their total financial picture and make logical, appropriate recommendations to them. I have earned this strong position through education and placing their interests first. If you offer these same services based on facts, your clients will follow suit.

A word of caution
Before you start this exercise, ask your clients to provide you with documentation of their assets and liabilities. Do not rely solely on what they tell you. Always require written confirmations or brokerage and insurance company statements, and the like. Proper documentation ensures accuracy and completeness. Get the truth, the whole truth and nothing but the truth.

In many cases, acquiring this information is the most difficult step in the process. Fortunately, your trained professional staff can perform the next step—compiling this information on itemized-investments and net-worth statements. Next, you will develop an analysis to present to your client based on facts and learned recommendations.

Be assured that placement of all needed products will create a slam-dunk close. Yes, it is true that by following these time-tested steps, you will spend a significant amount of time acquiring facts and preparing an analysis for presentation. However, you will save a great deal of time and energy during the closing process.

What is more important, the information you now have on your client will inevitably allow you to provide better services in the future, which will result in more compensation for you.

Categorizing assets properly
It is very important that you arrange the itemized investments in the client’s list of assets under the appropriate categories. This makes it easier to organize additional details specific to the kind of investment the client has. For example, there are differences in the information provided for the “real estate” category, which can include primary and secondary residences, rental properties and vacant lots, and the “cash accounts” category, which can include such things as checking and savings accounts, CDs, money market accounts and Treasury bills.

Be sure the financial statements you develop show only the investment categories your client currently owns. By customizing these financial statements, you are providing a valuable service to your client—you are offering simplicity, clarity and greater personalization. Avoid using standardized forms that list several investment categories and may cause confusion.

Next month in this column, I will address another essential element of a comprehensive financial plan—insurance analysis—and why your clients will appreciate this summary report.

Donald Ray Haas, CLU, ChFC, CFP, MSFS, of Southfield, Mich., has been an insurance agent and financial consultant for 45 years. For copies of his net-worth, itemized-investments and history net-worth statements, contact his office at 248-213-0101 or by email at


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