The interactions between wealth advisors and their business owner clients are crucial for creating the best financial outcomes possible. Wealth advisors have a vested interest in their client's success and are uniquely positioned to be the "quarterback" in helping business owners build value, mitigate risk, and create amazing outcomes. However, you don’t need to be an expert in everything. With interVal, everyone has a role to play based on their strengths and expertise.
Understanding the Business Value
One of the first and most critical areas wealth advisors should focus on is understanding the value of their client’s business. For many business owners, their business is their largest, albeit non-liquid, asset. Knowing the business’ value impacts the overall financial plan and informs decisions on key areas like insurance.
Many business owners have shareholders agreements or buy-sell agreements that dictate how the business will be handled if something happens to one of the owners. The most cost-effective way to fund these agreements is through life insurance. To determine the appropriate coverage, understanding the business's current value is essential. If this value increases over time and the insurance isn’t updated, the owner could be underinsured, exposing them to unnecessary risk.
Setting Goals and Tracking Progress
Another critical aspect for wealth advisors is to engage in their clients' goal-setting process. The business value is a starting point for their future ambitions. Encourage business owners to view this number as a launching pad for setting and achieving their goals. By helping them set a target and timeline, and tracking progress together, you ensure they remain focused and motivated.
Statistics show that business owners who interact with the interVal platform and set goals grow 29% faster year-over-year than those who don’t. This translates to future AUM that grows simply because it is being measured—benefiting both you and your business owner client.
Interpreting Data and Insights
interVal excels at synthesizing financial statement information and providing clear, actionable summaries. Wealth advisors don’t need to be financial experts; interVal's job is to distill complex data into simple, consumable insights. This empowers advisors to take meaningful action based on key information without being overwhelmed by data.
For instance, if interVal’s analysis reveals excess working capital on a business owner’s balance sheet, this information is shared with you. This insight allows you to have informed conversations with your client about how to best utilize that capital. Whether it’s reinvested in the business or allocated differently, knowing about this capital opens up opportunities for strategic planning.
Opportunities for Insurance and Growth
interVal helps identify two key areas where wealth advisors can add immediate value: insurance opportunities and the availability of excess cash. Beyond these, interVal also calculates which businesses could handle additional debt to support growth initiatives. While you might not place debt yourself, this information positions you to guide your clients in exploring different growth strategies, benefiting both of you in the long term.
Empowering Informed Decisions
Placing insurance and wealth products provides short-term benefits, but empowering clients with knowledge and feedback through interVal is what creates sustained value. The platform’s insights help business owners make informed decisions, continuously improving their business’ health and structure. This, in turn, creates ongoing opportunities for you to add value and support your client’s journey towards success.
By leveraging interVal, wealth advisors can streamline their processes, enhance client relationships, and unlock growth opportunities. This collaborative approach ensures that business owners are well-informed and well-prepared to achieve their financial goals, leading to mutual success and a thriving advisory relationship.