Maximizing Financial Advisor Impact: How Daily Money Managers Strengthen Advisor-Client Relationships

In my previous career as a financial advisor, I often found myself in a delicate balancing act. On one hand, we strive to build deep relationships with our clients, understanding their unique needs, goals, and aspirations. On the other hand, clients may need daily or weekly help to implement their financial strategy or complete their financial tasks. Annual or semiannual meetings provide valuable touchpoints, but what happens in between those meetings? How can you ensure that your clients stay on track and implement the financial plans you painstakingly create?

Enter the Daily Money Manager (DMM). A relatively new player in the financial services arena, the DMM serves as a bridge between the advisor and the client, offering a range of services like bill pay and fraud monitoring that complement and enhance the advisor-client relationship.

Let’s explore how a DMM can strengthen the critical advisor-client bond.

1. Alternative to a Family Office

DMMs handle everything from bill pay and budgeting to monitoring bank and credit card transactions. We take care of the details, including mail sorting and maintaining a meticulous financial inventory. This frees up the advisor’s time to spend deepening client relationships. If your firm lacks these services, partnering with a DMM can offer a solution for clients, akin to the support provided by a family office. DMMs aim to bring peace of mind to our clients’ financial lives, allowing them to concentrate on strategic financial planning with their advisor’s guidance.

2. Financial Plan Implementation Support

Financial plans are only as effective as their execution. Unfortunately, many clients struggle to take the necessary steps to implement their plans fully. This is where the DMM comes in. The DMM works side-by-side with clients during these gaps to review the financial checklist, answer questions, and help clients stay on track. Whether it’s updating beneficiary designations, organizing assets and debts so they understand their full picture, or ensuring that insurance coverage remains intact, a DMM keeps the momentum going.

DMMs help clients follow through on the recommendations you’ve made in between meetings. Imagine having a professional who helps your clients organize their financial lives so your next meeting is about their future strategy not completing a checklist item. A DMM is equipped to enhance your services, creating a powerful client team.

3. Real Spending Insights

Advisors often rely on assumptions about client spending when creating financial models. However, assumptions are often low which causes a false sense of security. The DMM provides real-time spending data—actual numbers, not estimates and categorizes spending to give clients a clear picture of their financial lives. Armed with this information, advisors can fine-tune their projections, adjust withdrawal rates, and help clients make more informed decisions. DMMs offer insights into your client’s financial behavior.

4. Account Titling and Estate Planning

Proper account titling is essential for estate planning. The DMM works alongside the client to title their accounts correctly ensuring alignment with the client’s estate plan. This seemingly mundane task can have significant implications for the client’s legacy and reduce the stress of executing the estate when they pass away. By collaborating with the DMM, advisors can rest assured that the details are meticulously handled during this stressful, yet critical, time.

5. Tax Document Organization

Tax season can be chaotic. The DMM assists clients in organizing their tax documents, making the process smoother for the client, their advisor, and their CPA. Imagine the relief when Tax Day nears, and everything is neatly categorized and ready for review. No more forgotten documents or walking a client through how to download the most recent statement from the custodian.

6. Timely Bill Payments

Missed bill payments can lead to financial stress and jeopardize insurance coverage. The DMM ensures that bills are paid promptly, preventing unnecessary disruptions and late fees. Advisors can focus on strategic planning, knowing that their client’s day-to-day financial tasks are handled.

7. Clear Designation of Responsibilities

As financial professionals, we recognize the importance of delineating responsibilities. The separation of duties among the DMM, CPA, financial advisor, and attorney isn’t just about efficiency—it safeguards the integrity of the advisory process. A DMM relieves you of time pressures and distractions. Whether it’s bill payments, estimated tax payments, budgeting, or managing daily finances, DMMs handle the operational details. This allows the advisor to concentrate on strategic planning, portfolio management, and aligning the client’s financial path with their aspirations.

Advisor-Daily Money Manager Partnership

In the evolving landscape of financial advice, the DMM emerges as a valuable ally. By collaborating with a DMM, financial advisors can enhance the stickiness of their services, deepen client relationships, and ensure that the best-laid plans become a reality. Consider adding a DMM to your client team—a partner who not only manages the daily financial minutiae but also strengthens the advisor-client bond.

Remember, it’s not just about the big meetings; it’s the small, consistent steps that truly make a difference.

Further Reading

How to Choose a Daily Money Manager for Your Finances (moneycrashers.com)

Do Investors Need a Daily Money Manager? (usnews.com)

How a Daily Money Manager Helps Your Investment Advisor or CFP® Professional - AADMM