When it comes to giving financial advice, it's all about adding value. How do we provide value to our clients? A lot of times this question is not easy to answer because so many advisors sound the same. We use phrases like "great service," "protection of principal," or even "lifetime income." But what do we really offer our client that is unique?
A lot of times this comes down to education. I am a big believer in educating oneself and also having patience while educating one's clients. If we spend 90 percent of our time sitting in front of clients and prospects, how well educated can we really be? Furthermore, how much value are we offering our clients?
The tax realm is one area where many advisors need further education. For example, a non-deductible IRA is often utilized by those in higher income brackets who have an employer-sponsored plan. The main difference between this and a traditional deductible IRA is that the former does not offer a tax deduction at the time of contribution. At the time of distribution, the holder of the non-deductible IRA will avoid paying taxes on the full withdrawal and thus isn't taxed twice. For some clients, a Roth IRA may be a better solution, but that's done on an individual basis.
