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By David GordonDirector, Eaton Vance Advisor Institute

Most people enjoy talking about themselves because they are experts on the subject. And most people enjoy sharing their opinions, solicited or not. For an advisor, this temptation can be especially challenging when clients ask what you think about the markets, the economy, politics and taxes.

There is a big difference between objective facts and forward-looking opinions. Advisors who offer their opinions about what might happen, even at a client's request, may be wandering into dangerous territory. If your client makes an investment decision based on your prediction and it turns out to be wrong, your client may blame you.

So how can you answer client questions without offering your opinion? The After-Tax Advisor® could pose a counterquestion: "What do you think with happen with [fill in the blank], Mr. and Mrs. Client? Knowing what you are most worried about can help me make some suggestions to address your concerns."

Talking about clients' concerns and opinions helps them feel heard. Consider follow-up questions like these:

  • "If the gift and estate tax exemption is reduced, would you be willing to transfer some of your assets to heirs today while the exemption is high?"
  • "If your fear of rising corporate tax rates turns out to be justified, would it cause you to reduce your domestic equity exposure in favor of corporate bonds?"
  • "If tax reform stalls until after the 2022 midterm election, what would you do differently before the midterms? After?"

Questions like these can help turn the conversation away from predictions and put the focus on better understanding your clients' concerns.

Bottom line: The After-Tax Advisor uncovers clients' opinions, asks probing questions and presents alternatives that address each client's unique concerns.