Council Post: 12 Questions Financial Advisors Are Hearing From Clients (And How They Answer Them)

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Amid inflation, high interest rates and an uncertain market, people are becoming increasingly concerned about their finances. If you’re a financial advisor, your clients might be asking you some tough questions right now—some of which have no definite answers.

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However, despite these challenges, you can still use your expertise to guide your clients towards a sustainable financial future. below, members of Forbes Finance Council Share 12 questions financial advisors are hearing from clients on a regular basis right now and how they are answering them.

1. Are we heading for a recession?

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As consultants, clients always ask us to look into our “crystal ball,” with the current question being, “Are we heading into a terrible recession?” This is a reasonable question, but in our opinion a question with the wrong energy. Rather than trying to “exclude” an unintentional outcome, advisors should focus on finding resilient investments (traditional bonds are not the answer!) that will be more insulated from market downturns. , Jeffrey Sarti, morton wealth

2. Are we in a recession, and what does this mean for my plan?

Customers want to know if we are (or will be) in recession. We tell them that we position the portfolio for success over the long term. Markets fluctuate, and as long as their asset allocation accounts for their liquidity needs, risk tolerance and time horizon, they will meet their goals. We review their financial plans and ensure that their asset allocation is in line with their long-term goals. , Aviva Pinto, Wealthspire Advisors

Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. am i eligible?

3. When should I enter the market?

People are worried about an impending recession and stagflation in the coming year, and many are trying to stay on edge and join in when the market is down. No one can predict the market, so invest smart and always be on the lookout for good investment opportunities. , Rakesh Bansal, 7C Equity Group

4. Is now a good time to invest?

With all the adversities like market downturns, inflation, recession, world conflicts and rising interest rates- many clients ask, “Is this a good time to invest?” The media and individuals often preoccupy themselves with short-term volatility and consequences. Why would you focus on short-term worries and potential unrealized losses while investing for the long term? Now is the best time to invest. , louis cannataro, Canataro Park Avenue Financial

5. How much will inflation increase?

Many customers are wondering how bad inflation will be. This is usually both a short-term and long-term concern. In the short run, inflation makes budgeting very difficult. But given the long term, inflation can destroy the spending power of nest eggs that took years to build. My advice is to focus on the things you can control: spending, saving, producing income, and investing wisely. , Todd Sixta, Straight and Sound Wealth Management LLC

6. Should I take a loan to start a business?

Taking on debt can be scary, and it is a risk, but so is starting a business. The key to taking out debt is never taking on more than you can afford to pay. It is a good practice to take on a loan that is much less than you can afford. Building business credit helps you in the long run, and one way a business can do that is by taking out loans. , Jared Weitz, United Capital Source Inc.

7. How can current events affect my long-term goals?

I see that many clients want to know how the combination of a market downturn, rising inflation and a recession affects their long-term goals. As financial advisors, we must incorporate each of these possibilities into our clients’ long-term financial plans. So, when we face these questions, we can show them how we’ve prepared and their plans are on track. , Justin Goodbread, Wealthsource Partners, LLC

8. How do I know when to sell, hold or buy?

The most common question we hear from customers is, “When is the right time to sell, hold or buy?” Everyone is looking for how to maximize your returns and minimize losses in the highly volatile market conditions we see today. The best thing to do is not to look for a universal answer; Everyone’s situation and goals are different, and with enough time, even the most volatile cycles return to normal. , Joseph Orseno, tilt

9. How bad will the market condition be?

Right now, many customers are wondering how bad the market can be. A prepared financial advisor should be able to discuss specific portfolio activity performed during the most recent market cycle as it relates to opportunities in the market. Volatility is not just something to be weathered, but an active search process towards new or adjusted allocations. , Ivan Ilana, Align Wealth Advisory Investment Management (AWAIM®)

10. What is my risk in a down market?

Investors are still worried about the fall in the market. Advisors need to know the risks facing their clients, which is measured by the way clients perceive them. If a client’s downside risk is explained correctly, an advisor can put them in the right risk bucket. Show historical recovery to the investor and this will help them gain confidence in their financial plan. , robert miller, Frontier Asset Management LLC

11. When should I sell my business?

People often ask about selling their business. Time is an ingredient, but preparation is far more influential. A seller should prepare about two years from the expected transaction. Running in the market rarely works. Do homework and increase your business value. , Matthew Goldston, PKF Texas

12. How can I ‘recession-proof’ my business?

Lots of customers want advice on how to “recession-proof” and “pandemic-proof” their businesses. Fortunately, many of the same things that have always been advised are still some of the most reliable strategies. Hire proactive, reliable CPAs/Financial Advisors; Keep a close watch on day-to-day financial matters; Have a good, consistent relationship with your banks; And keep a cash reserve on hand. , Julio Gonzalez, Engineer Tax Services Inc.

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