ASSET GAIN NEW CLIENTS AND ALLOCATION ASSETS THROUGH AN ASSET ALLOCATION REVIEW FOR FINANCIAL PROFESSIONAL USE ONLY

Transcription

1 STRATEGICADVISOR ASSET GAIN NEW CLIENTS AND ASSETS THROUGH AN ASSET ALLOCATION REVIEW ALLOCATION FOR FINANCIAL PROFESSIONAL USE ONLY

2 GAIN NEW CLIENTS AND ASSETS THROUGH AN ASSET ALLOCATION REVIEW GAIN A COMPLETE PICTURE OF PROSPECTIVE CLIENTS TOTAL ASSETS UNCOVER NEW ASSETS FROM EXISTING CLIENTS POSITION YOURSELF AS A TRUSTED ADVISOR CREATE LONG-TERM CLIENT RELATIONSHIPS SPEND LESS TIME ANSWERING CLIENTS QUESTIONS DURING MARKET DOWNTURNS Analyzing your clients current asset allocation is an important part of your role as an advisor. Just as an airline ticket includes both the departure and arrival destinations, you must have a firm grasp of your client s existing portfolio where it is today to make appropriate recommendations for the future where it is going. The Asset Allocation Client Worksheet helps you do just that. Often, prospects and clients have a collection of mutual funds, individual stocks, IRAs, a 401(k), and other accounts at several firms without an overall investment strategy. Few clients actually know how they re allocated by asset class or style across all of these investments. With the Asset Allocation Client Worksheet, you can collect their financial information in one place for a quick and easy analysis to find overlaps and deficiencies in various asset classes. In doing so, you ll uncover new assets of existing clients and learn the total wealth and asset-gathering possibilities of prospective clients. You ll lay the groundwork for a discussion on the benefits of consolidating assets with you and show prospects and clients that you can provide exactly what they need a disciplined approach to investing based on their individual goals, risk tolerance, and time horizon.

3 gain new clients and assets through an asset allocation review gain new clients and assets through an as APPLY INVESTMENTS TO THE WORKSHEET The Asset Allocation Client Worksheet is easy to use. For each account and investment, place the dollar amount that corresponds to each asset class and style. To help you easily understand how a completed form might look, we ve compiled a sample Worksheet. The simplest asset allocation involves a single client and a single account type, such as all taxable or all taxdeferred accounts. However, you may examine portfolios that are more complicated. When working with multiple account types or multiple investors, such as a husband and wife who want to keep some of their assets separate from their joint account, it may be helpful to complete a separate Worksheet for each situation. CATEGORIZE THE INVESTMENTS INTO ASSET CLASSES Categorizing the investments into asset classes can seem challenging, particularly when trying to classify a diverse mix of securities, mutual funds and blended portfolios. The Asset Allocation Client Worksheet makes this easier with its organized, easy-to-understand format. To begin the asset allocation review, ask your client to provide you with all of his or her investment documents, including brokerage account statements, annuity contracts, 401(k) statements, and mutual fund holdings. Many of these investments have already been categorized by analysts or investment managers; however, some investments aren t as straightforward as large-cap growth or large-cap value. The following suggestions may be helpful when you categorize these investments on the Worksheet. Mutual Funds and Stock Portfolios These investments should be categorized according to their published asset class and investment style. Annuities Look at each investment option within the annuity and categorize each according to their published asset class and investment style. Balanced Portfolios Determine the percentage invested in stocks and bonds and their asset classes, then segment the total portfolio balance according to those percentages. Global Equities Establish the percentage of international and U.S. equities and the asset class and style of the U.S. equities, then distribute the total portfolio value appropriately. Other Assets Some investments, such as convertible securities, REIT s and sector funds, may be difficult to categorize and should be considered on a case-by-case basis. Unique assets, such as low-basis, highly appreciated securities can also present challenges depending on the value of the securities, the tax consequences of divestiture, and the client s personal preferences. Not sure how to categorize a specific investment? Contact your Regional Coordinator or Sales Desk for information on individual mutual funds, stocks, bonds, and other securities. THE BOTTOM LINE Once you have a full picture of your client s total assets, and you ve determined his or her goals, risk tolerance, and investing horizon, you can create a broad asset allocation to spread risk across different asset classes. In doing so, you ll ensure that your clients are properly positioned to help meet their long-term goals. It is through this advisory process that your value as a financial professional truly stands out. FOR FINANCIAL PROFESSIONAL USE ONLY

4 set allocation review gain new clients and assets through an asset allocation review gain new clients and SAMPLE WORKSHEET ACME Investments MSR & Co. E.A.M. Financial, Inc. MSR & Co. (Stocks) $40,000 Invest-a-Buck (Stocks) $45,000 85,000 Samuel Marsh Invest-a-Buck (Stocks) $45,000 Invest-a-Buck Ed Fitzgerald ACME (Mutual Funds) $50,000 MSR & Co. (Stocks) $160,000 E.A.M. Financial (Stocks) $250, ,000 ACCOUNT #1 A CME I NVESTMENTS An account with a total value of $100,000, containing 50% large-cap aggressive growth mutual funds and 50% Europe growth mutual funds. List the account on the Worksheet in two places: The large cap growth section with a value of $50,000 (50% of the total value of the account) The International Equity section with a value of $50,000 (50% of the total value of the account) 45,000 Invest-a-Buck (Bonds) $60,000 60,000 ACME (Mutual Funds) $50,000 50,000 ACCOUNT #2 MSR & CO. An account total value of $200,000, containing roughly 80% large-cap growth stocks and 20% large-cap value stocks. List the account in two places: The large-cap growth section with a value of $160,000 (80% of the account s total value) The large-cap value section with a value of $40,000 (20% of the account s total value) $460,000 85,000 66% 12 45,000 50, , ,

5 assets through an asset allocation review gain new clients and assets through an asset allocation review PROSPECTING LETTER To help you reach out to prospects for an asset allocation review, we ACCOUNT #3 E.A.M. F INANCIAL, I NC. A Managed Money large-cap growth portfolio of stocks valued at $250,000 have created the following prospecting letter. This letter is for use without a prospectus. Reproduce it on your approved letterhead, including your broker/dealer information and send it to prospects. The content of the letter has been approved and cannot be changed. List the account and its entire balance in the large-cap growth section (Date) ACCOUNT #4 I NVEST- A -BUCK A Managed Money large-cap balanced portfolio containing 60% stocks and 40% bonds with a total value of $150,000. A review of the portfolio revealed that the stock portion is invested in 50% small-cap value and 50% large-cap value and the bond portion is invested in municipal bonds. List the account in three places: The small-cap value section with a value of $45,000 (60% ($90,000) of the total portfolio is invested in stocks, and 50% of the stock investments are invested in small-cap value) The large-cap value section with a value of $45,000 The municipal portion of the fixed income section with a value of $60,000 (40% of the total value of the portfolio) Dear (prospect): You work hard for your money. Is it working hard for you? As an investor, you might have a mix of investments that includes mutual funds, individual stocks and bonds, IRAs, and a 401(k). Do you know how your investments are allocated across the different asset classes and styles? As you made each investment, did you have an overall financial plan in place? Did you take the necessary steps to minimize your exposure to risk while still positioning yourself to achieve your goals? Market history has proven that different asset classes perform well at different times. Sophisticated investors such as large pension funds and very wealthy individuals have discovered that a financial plan with proper asset allocation and access to a professional money manager is an effective way to help weather the market s ups and downs. Unfortunately, many individual investors have no idea whether their investments are properly diversified. As a [title/firm], I make it my business to help people plan for the future. Together, we can review your current portfolio s asset allocation and see whether your investments are positioned to help you achieve your long-term goals. We ll talk about your financial goals and concerns and develop an effective plan that s designed to address your specific needs. Please call me today at [phone number] to schedule an appointment. Together, we can make sure that your investments are properly allocated so you ll know that your money is working for you. Sincerely, (Your name and title) Prudential Investment Management Services LLC, Three Gateway Center, 14th Floor, Newark, NJ IFS-A071490

6 gain new clients and assets through an asset allocation review gain new clients and assets through an FOR MORE INFORMATION Pruco Securities Registered Representatives, call: Advisory Sales Desk: (800) Prudential Securities Financial Advisors, call: Mutual Fund Sales Desk: (800) Annuity Sales Desk: (800) Managed Money Sales Desk: (800) Securities products and services are offered through Pruco Securities Corporation, 751 Broad Street, Newark, NJ ; Prudential Securities Incorporated, 199 Water Street, New York, NY 10292; and Prudential Investment Management Services LLC (PIMS), Three Gateway Center, 14th Floor, Newark, NJ All are Prudential Financial companies. Prudential Financial is a service mark of The Prudential Insurance Company of America, Newark, NJ, and its affiliates. IFS-A PRU1432 Ed. 05/01/2002 FOR FINANCIAL PROFESSIONAL USE ONLY