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Eight Resolutions to Keep

These will help your clients put their financial houses in order.

By Janet Arrowood

Rather than wait until New Year’s Day to make all those financial resolutions, here are eight that are worth sharing with your clients right now.

  1. Schedule an annual review. An annual review is the surest way to renew the financial commitment between you and your client. Since people tend to use the first few days of the year to think about their goals, they are likely to be more receptive to reevaluating their insurance and investment plans and setting financial goals.
  2. Plan ahead to reduce 2006 taxes. Most clients wait until the end of the year to take last-minute tax-saving steps. By starting this process at the beginning of the year, however, the tax savings can be more significant and the process less traumatic.
  3. Plan ahead to increase investable income. If your clients are withholding more than they should on their taxes, have them increase their exemptions. If they are using their withholding as “forced savings,” this is a perfect way to put money into a mutual fund or life insurance policy. If you know there is a big deductible expense they have coming up, such as a home purchase (with deductible points), have them adjust their withholding.
  4. Manage cash flow and debt levels. Help clients develop a plan to pay off high-interest credit cards and consumer debt. Ask them to consider reducing the number of credit cards they have.
  5. Check and clean up credit bureau reports. In virtually all states, your clients can get a free credit report from each credit bureau once a year. Even if it costs a few dollars, have your clients do it. Then look at each entry. Make sure the name and type of debt is correct. If the account has been paid off or closed, make sure each report reflects that. Look for incorrect or inaccurate entries. If your client can prove that a payment was not late, for example, he can contest it in writing. Credit cards must be canceled in writing—a phone call or cutting up the card is not enough.
  6. Protect your identity and good name. Encourage your client to buy and use a shredder. If a piece of paper has a name, a Social Security number, credit card information, driver’s license number, date of birth or financial information on it, it should be shredded or stored in a safe place. Your client should not give out his SSN to anyone unless he initiated the call, and only to employers and financial entities. He should not use an SSN as an identification number on a driver’s license, medical cards or checks, and should never send personal data over an unencrypted website link.
  7. Review beneficiaries. Too many ex-spouses or underage children are still the beneficiaries of retirement plans and life insurance policies. While state law will override some incorrect selections, these laws should not be counted on in asset distribution. In other cases the client has had children or married but the plans and policies list parents and siblings from the premarriage and prefamily days.
  8. Review wills and trusts. About half of all people in the United States have no will or have an outdated one. Too often clients name a personal representative in their will without checking with that person or providing the access to liquid funds to let the representative handle the estate.
This is a perfect opportunity to get to talk to other potential clients and help your existing clients. Too often a trust gets put in place and is never properly funded. The insurance for the irrevocable life insurance trust was never bought or it lapsed, or the assets were never transferred to the credit shelter trust.

Janet Arrowood is the managing director of The Write Source Inc. She can be reached at


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