Moriah Diedrich is a demand generation specialist at NaviPlan, the financial planning technology provider of choice for more than 140,000 financial professionals.
Most people recognize the importance of financial planning to achieve goals and prepare for retirement, yet a recent study by Fidelity revealed that only 18 percent of Americans have a written retirement plan. Why? Perhaps it is a combination of the fear of discovering they are financially unprepared and the discomfort of discussing the taboo topic of money. Whatever the reason, advisors should demystify client fears and begin proactively planning for the future today.
Plan for the worst, hope for the best
Crises come out of nowhere and can be financially crippling without proper planning done in advance. Many clients have difficulty seeing their futures clearly, so advisors must be forward-thinking and determine what obstacles might be encountered months and years down the road. For example, presenting new parents with education expense information can increase the urgency of creating college funds for young children.
Reap the rewards of a plan
Goals like retirement and education planning are not particularly glamorous, so it can be difficult to convince clients of the importance of developing a comprehensive financial plan. Instead, advisors might be able to identify an item such as a new vehicle, a vacation, or a vacation home that can be made attainable by modifying spending behaviors. Cutting unnecessary expenses can place these goals within a client's reach, increasing their likelihood of adopting a financial plan and opening the door to conversations around retirement goals.
Why taking shortcuts in financial planning can be detrimental to advice quality
Lacking certainty about the financial future and where clients stand can leave them feeling out of control and likely intimidated by the planning process. So how can advisors get clients talking? Reframing the conversation around a client's loved ones can encourage clients to take control and be proactive. Helping clients understand the gaps in their financial picture and showing them how a plan can close those gaps to create stability for their families communicates the importance of comprehensive planning.
Equip your firm with planning software
Simplify the planning process by adding a scalable and robust financial planning software to your tech stack. NaviPlan software supports the forward-thinking approach of advisors by accounting for future goals (retirement, education, etc.) and for needs and protection in the event of death or disability (survivor income, long-term care, etc.).
Beyond identifying client needs, NaviPlan allows advisors to track major purchase goals (ie purchasing an RV or saving for a wedding) that can encourage clients to change their spending habits and consider creating a comprehensive financial plan. Further, the NaviPlan client portal gives clients unhindered access to their plans, expedites the onboarding process, and, most importantly, allows clients to regain a sense of control over their financial futures.
To learn more about how NaviPlan helped an investment advisory firm increase conversion rates by nearly 100 percent, click here .