Advisors tackle threat to client assets

Advisors tackle threat to client assets

Advisors tackle threat to client assets A report by the Financial Consumer Agency of Canada found that only 46% of people have a budget. Of those who do have a budget the survey found 96% stuck to it, which shows just how effective one can be in helping to keep finances in check.
 
“Budgeting is challenging because there is so much access to credit and spontaneous spending is easy,” said Mike Morrow is a financial planner and the author of The Loyalty Edge and The Picture Sells the Story. “A generation ago, people cashed their cheque and only had that money to use until their next payday. It made budgeting easier.”
 
Morrow highlights how instant credit can make it hard for people to stay on track and focus on the long term. He says people often bristle when they hear the word ‘budget’ and so it’s better for advisors to use another term when talking to clients.
 
“We talk to our clients about their key goals and refer to these goals as 'envelopes.'  The concept is that we allocate a certain dollar amount to each envelope, envelope examples vary from family to family but some common ones would be, debt reduction, education, insurance, vacation.”
 
Instead of bombarding clients with talk of budgeting and the dangers of unsecured credit, advisors are opting to use softer terms to impress upon them the importance of sticking to a formulated plan and not letting ambiguous and unexpected monthly costs get in the way..