For Financial Advisors
One of the biggest challenges for any financial advisor seeking new clients is how to stand out in a marketplace that is flooded with competition. Today it's not enough to offer the minimum required services. The professionals who are thriving in this economy (and in any economy for that matter) are the ones who go above and beyond to look after the interests of each and every client and provide superior service.
What's one of the easiest ways to add value? Practice due diligence and take a look at both the big picture as well as the smallest details of a client's portfolio. Independent financial advisors truly practicing due diligence need to focus, not on just the client's stocks, bonds, mutual funds and bank accounts, but also on the client's real estate property.
Even if the real property is a static asset that will be held by the client, the financial advisor practicing due diligence will add value to his or her services by reviewing how title is held and the client's plans for the real property in the future.
The North American Securities Administrators Association (NASAA), the oldest international organization devoted to investor protection and administrator of the Series 66 exam to protect consumers devotes 30% of their test to client investment recommendations and strategies.
First and foremost, NASAA requires a review of the client's profile:
All of these factors are key components in a client's financial goals and strategies. A client's goals and strategies cannot be properly determined without knowing how the real estate is titled and what will happen to the real property on the death of the client. You also need to identify the type of client. Is your client an individual, business entity, trust or estate? Understanding the type of client will help you determine how real property should be owned.
In the Investor Bill Of Rights clients have the right to: "Receive recommendations consistent with your financial needs and investment objectives."
Any recommendation of financial needs and investment objectives must include real property. To make a recommendation consistent with the client's financial needs and investment objectives, the independent investment advisor needs to know how title is held. If title is inconsistent with the needs and investment objectives, the investment advisor should be able to make a recommendation on how to correct the situation.
This results in strengthening client relationships and generating more word of mouth referrals in today's challenging business environment. One resource to help independent investment advisors make the proper recommendations is called "Deed and Record". They quickly research for you how title is held which allow you to understand what will happen to the real property in the future.
For instance, if a client has a trust, the financial advisor practicing due diligence will verify if the client's real property is owned by the trust. Any property not in the trust is at risk for probate. Not only can you now point out the risks to the client but you can also offer to assist them in transferring the title deed into the trust, saving them time, money, and hassle. Most importantly, your client will know that you are a trusted advisor, looking out for their best interests.