At a certain point, financial planning concepts become old hat to advisors. But those advisors run the risk of using complex terms that can confuse or even alienate their clients.
Thank goodness for the analogy.
A good analogy can help financial advisors break down difficult-to-understand topics to keep clients (or prospects they’re trying to close) in the conversation.
Last week on Reddit, advisors bandied about their favorite analogies. There were some gems, like this one from user jasonsimpsoncfp on helping clients resist the temptation to become reactionary: “Your portfolio is like a bar of soap. The more you touch it, the smaller it gets.”
Financial Planning reached out to advisors across the country to gather some more great analogies. They cover a wide range of topics, from explaining the basics of financial planning to understanding volatility and the importance of diversification.
The selections below have been lightly edited for clarity and length.
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