From The Desk Of is a series that profiles real advisors solving problems for their clients using GS Select.
Q. How can financial advisors help their clients be prepared for their expected -- and unexpected -- liquidity needs without disrupting their investment strategy?
A. Jen: The independent space has been challenged to solve for their clients’ cash needs, as their custodian may only offer accommodation-type lending solutions. GS Select uniquely fills this need by providing an easy and transparent platform for advisors to meet the liquidity and near-term capital needs of their clients.
Q. How do the financial advisors you work with differentiate themselves amongst the competition?
A. Pat: Financial advisors help their clients achieve lifetime financial goals by deploying asset management strategies that align directly to those goals. At their periodic reviews, they provide an analysis of the market’s performance, review their client’s goals and financial performance, and discuss adjustments, if necessary, to stay on track. However, advisors who differentiate themselves also talk about building flexibility into the portfolio plan. Addressing anticipated, or the possibility of unplanned, liquidity needs and the potential impact it may have on a portfolio, provides a level of trust and education clients value and want from their financial advisor.
A: Jen: When advisors help their clients think about both sides of their balance sheet, the discussion goes beyond wealth accumulation and addresses the concept of financial flexibility. This includes planning for the unexpected in addition to known life events such as education, retirement, and more. Here are examples where advisors have discussed using GS Select as a liquidity option:
- What if their children were planning on attending their state university but were instead accepted to their dream “reach” school?
- What about covering the tax burden associated with selling assets that appreciated over time?
- What if market cyclicality is in the midst of a correction when the client calls requesting to sell assets for an unexpected need? Because of the timing, you think they will miss the recovery if they sell now.
A. Pat: Overall, we’ve noticed the availability and timing of liquidity is a foundational element of an advisor’s relationship with his or her client. The need for liquidity can be unpredictable and having a tool like GS Select to smooth out the variables is critical to keeping their overall financial plan.
Q. So how do advisors elevate the dialogue with their clients and build flexibility into their financial plan?
A. Pat: GS Select has been a leader in this space by addressing this exact point. For clients, a revolving line of credit secured by their assets can allow them greater flexibility to borrow when needed. We consider GS Select a practice management tool that can help advisors deepen the relationships with their clients by solving a need and retaining their assets. They can also use GS Select to compete and win new business.
Q. How do advisors determine if GS Select makes sense for their practice?
A. Jen: We find that GS Select resonates with advisors because:
- They can better retain their clients’ assets and maintain their strategic asset allocation and overall plan.
- A securities-based line of credit can further strengthen the advisor’s relationship with the client and serve as a differentiator in the marketplace.
- It gives advisors peace of mind knowing that their clients are prepared for any liquidity need – and it is so easy for the client to use the program.
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