Be their financial coach: Magnetic prospecting method for financial advisors

August 04, 2021 by Moriah Diedrich

Be their financial coach: Magnetic prospecting method for financial advisors by NaviPlan

About the author

Moriah Diedrich

Demand generation specialist

Moriah Diedrich is a demand generation specialist at NaviPlan, the financial planning technology provider of choice for more than 140,000 financial professionals.

Money can’t buy happiness, but it sure can help. Much of our lives revolve around money for establishing comfort and a sense of security. Why, then, are we so financially uneducated?

The 2020 TIAA Institute-Global Financial Literacy Excellence Center (GFLEC) Personal Finance Index reported that respondents answered just 52 percent of personal finance questions correctly. While this score has increased by three percentage points since 2017, there is still much to learn, and people are eager to do so. Cue the rise of financial coaching out of an increasing pursuit of financial literacy.

Wearing both hats: advising and coaching

Over the years, the role of the modern financial advisor has expanded from solely money management to becoming an advice-focused financial coach. Prospects look to understand budgeting, building emergency funds, and paying off debts long before they are ready for detailed planning discussions. Financial advisors who establish themselves as trustworthy sources for these concepts are building relationships that can expand over time to include comprehensive financial planning discussions.

Further, advisors are licensed professionals who can provide recommendations and advice (unlike financial coaches who don’t require certifications). Short-term, clients can be confident their advisor is setting them up to accumulate wealth so that eventually they can build a larger financial strategy together.

If you are already wearing both hats (advising and coaching), how can you make the most of these changing client expectations? My advice: lean into it.

Differentiating your firm as a financial coach

Advisors and wealth managers often struggle to differentiate their services from the masses, making it challenging to capture the attention of prospects and retain clients. Many advisors are building relationships by developing financial coach strategies that help prospects position themselves to create wealth, such as creating content. For example, writing microblogs around healthy financial habits can attract significant attention from people who want to improve their financial literacy.

By educating your target market around personal finance, you can demonstrate your financial knowledge to establish trust and credibility. This process can pave the way for wealth-building conversations that turn prospects into clients.

How can advisors navigate new realities in retirement planning?

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Using FinTech to move from coach to advisor

An easy way to transition from coaching into advising can be having a conversation about one of the top financial concerns for many people: saving for retirement. Although retirement planning can seem complex and time-consuming, the NaviPlan Guided Retirement tool utilizes smart assumptions to produce a financial needs analysis with only one data point – income. By simplifying this process for advisors while keeping a laser focus on creating accurate analyses with striking visuals, Guided Retirement can easily demonstrate the value of working with a financial advisor.

Another element of planning technology that can support your financial coach strategy is an interactive client portal. This tool can help expedite the onboarding process, offer clients 24/7 access to their financial plans, and allow clients to model contribution and timeline changes to see how adjustments impact their goals. The NaviPlan client portal enables clients to expand their knowledge of financial goals and explore how decisions can impact their success.

The value of a financial education

Financial coaching boils down to educating people about healthy financial habits. Advisors who have become the go-to source for financial knowledge are better positioned to convert clients who are ready to invest and grow the wealth they’ve built. On top of this, your financial technology can help simplify the process of bringing in new clients by showing the great value that moving from coaching to an advising relationship can create.

While money might not buy happiness, financial education is invaluable.

To learn how you can use NaviPlan to help transition clients from an educational to a planning relationship, click here.