What financial advisers should be doing for clients

| 12 Jan 2023

Financial advisers need to understand what clients are looking to achieve and how to take them there and keep them always looped into the process.

As financial advisers, it is your duty to understand your clients’ financial goals. Inherently you should be able to do five things for your clients: portfolio management, cash flow management, financial planning, tax planning and estate preparations.

Firstly, investment guidance is what advisors are known for, but it is not the only thing you should be able to do for your clients. Beyond being well versed in the financial markets, your offerings should include portfolio management involving complex diversification strategies. These should be used to create a portfolio that is designed to boost returns while lowering the overall risk. 

Diversification is typically achieved by holding assets across numerous asset classes. This means having a selection of assets that fall into the conventional asset classes, such as stocks and bonds, and also alternative investments.

You should be knowledgeable in enhanced diversification and offer guidance around what alternative asset classes are most suitable for your clients and also if they are not. You should be able to select specific investments within each asset class and educate them along the way.

Next, the impact of cash flow management can be felt in your clients’ day-to-day lives. They could have substantial savings and investments, but if they have no cash in their pockets to spend at the grocery store, they sure will not feel wealthy. 

Once you enter into a partnership with a client, part of your role is to help generate the cash flow they need for daily expenditures. You should help to facilitate regular withdrawals from their investment or registered accounts and ensure they feel comfortable meeting their everyday spending needs.

Creating a plan around how to cover the cost of a major purchase is also part of your responsibilities. You should be able to organise lump-sum withdrawals in a timely manner and manage any tax implication associated with the purchase. This goes for whether they are buying a new property, buying a new business or starting a charitable foundation.

Thirdly, the benefits of financial planning are often overlooked, but they are essential if your clients want to build and maintain their wealth. Financial plans are the cornerstone and foundation of financial management. Financial planning includes multiple aspects, such as retirement planning, education planning and debt reduction, while generating strategies to enhance wealth. 

These plans help set the tone for the relationship with your clients and provide clarity. Both you and your clients can continuously rely on the developed plan, which will lead the trajectory of actions and outcomes ahead.

Fourthly, while your clients may initially think of an accountant for their tax planning needs, they should consult you during this process, as well. Together, the accountant and you would make a great team to help clients manage and minimise their taxes while taking advantage of any planning strategies. 

A good example of how you can help with tax planning is through guidance and specific recommendations for what and how much to contribute toward your clients’ registered investment accounts. If applicable to their situation, you can help to maximise their tax-sheltered investments, ultimately putting more money in their pocket.

You should also help your clients with annual tax loss selling. With this tax strategy, it may be possible to offset any realised gains on their investments by divesting losing positions in their non-registered accounts.

Lastly, planning for what happens when your clients pass away is something many people put off. Though it may be tempting to postpone estate planning, it is a critical component of their financial well-being.

You should understand the importance of planning for the future, including what happens with your clients’ estate. 

Estate planning frequently neglects insurance. Often thought of as a backup to be used in only the most dire of situations, insurance is much more than that and can be a valuable addition to many estate plans. You should evaluate their financial situation and provide guidance about how insurance might benefit them and their loved ones.


This is an abridged version of an article which recently appeared in Forbes.