I’ve often heard it said that it is very difficult to be a generalist as a financial planner. One reason may be that there is a tremendous amount of information with which you must stay current. Being a financial planner has another challenge. Creating quality financial plans for affluent and high net worth clients can be a very labor intensive, time consuming process. Sure, there are software applications which allow the planner to get in and out of quickly, but how comprehensive are they? Allow me to digress a moment.
This week I spent part of my time completing my continuing education for the CFP mark. I found a wonderful resource called CE OneSource. As an alum of The College for Financial Planning, I was entitled to a discount. So for just over $120, I gained access to approximately 50 online courses for a full 12 months. This program will allow me to fulfill my CE requirements for the current cycle, which ends on November 30th, plus the following cycle, which begins on December 1st. It includes courses on financial planning, estate planning, investment planning, income tax planning, insurance, and ethics. You work at your own pace and receive your grade immediately upon completion of the final exam. The CE credits are reported each Monday. In short, it’s a great way to complete the required CE and learn something in the process.
Well, as I was studying the course entitled, “Risk Management and Investment Issues for High Net Worth Clients,” a thought occurred to me. It brought back memories of when I was enrolled in the CFP study program. Since risk management is such a key issue, why don’t more planners examine clients P&C insurance coverage? From personal to business liability, the risks of this select group of clients are far greater than that of Middle America. Since this is the market we seek to serve, shouldn’t we be discussing this? I think so. One good point brought out in the study material was “do the client’s policies coordinate well?” For example, let’s say the homeowner’s policy includes personal liability coverage up to $250,000. Does the client have an umbrella liability policy and, if so, what is the deductible? What if the deductible was $300,000? Then, the client would have a $50,000 risk exposure between the two policies, since the first policy stops at $250,000 and the umbrella policy begins at $300,000.
As advisors, I believe we need to be looking at this. The problem is that this is a lot to do for a one man shop. Ultimately, I hope to partner with other like-minded advisors to create a quality team approach to better serve these clients.