As financial advisors, we’re comfortable with using and explaining the time value of money in our conversations with clients and prospects. It’s a pretty simple and long-standing financial concept that is familiar to most people. But what about the money value of time? How can this be applied to our vocation?
As our practices evolve amid the drumbeat of the U.S. Security and Exchange Commission’s Regulation Best Interest, which among other things calls for the financial advisor to act in the best interest of the client, that simple notion of valuing our time becomes increasingly important. Yet, it gives us an excellent opportunity to discuss the money value of time with clients.
Henry David Thoreau said, “The true value of anything is the amount of life you are willing to exchange for it.” Time is human capital. In fact, the older you get, the more you realize that time is a non-renewable resource. The minute it takes to read this blog post is gone when you’ve finished.
So when describing how you get compensated for the work you do, try presenting it to prospects and clients with these tips in mind about how it’s an investment for both you and the client.
- Clients invest the time to answer questions that will help you better understand their values and attitudes.
- Clients invest the time necessary to produce all of the data you need to do the work accurately.
- Advisors invest time reviewing, doing the analysis and preparing strategies to meet the clients’ objectives.
This shows an equal investment of the world’s most valuable resource, which is both fair and in the client’s best interest.
Thomas Levasseur, of Dover, New Hampshire, USA, has been an MDRT member since 1990 and is a Court of the Table member.
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