3 key ways to leverage holistic financial plans

November 13, 2017 by Nathan Lukow

A young couple assesses their professional financial plan.

about the author:

Nathan Lukow

Account executive

Nathan is an account executive at Advicent, the financial planning technology provider of choice for nearly 100,000 financial professionals.

I spend a lot of time talking about the explicit value of providing clients with financial plans. For instance, “People will pay you money for financial plans.” While I have seen a notable increase in the number of advisors charging for plans over the past year, I think the intrinsic value of planning is often overlooked by firms that do not offer it. In addition to the revenue stream generated by plans themselves, here are three key ways that advisors leverage holistic financial plans provide to — and extract value from  their clients.

Introducing insurance

While it is usually not the primary focus, many RIAs do sell insurance when there is a genuine need. This can be a tricky conversation for advisors to navigate because the word “insurance," like “used car," can set off all manner of red flags and alarm bells in the minds of consumers. They have likely been approached about buying insurance in the past, and it is very possible that the person trying to sell that insurance did not leave a positive impression. The ability to illustrate the true need for additional insurance coverage in the context of a financial plan can go a long way in establishing credibility and positioning yourself as an authority, as opposed to reputation like that of a salesperson.

Uncovering latent needs

The catalyst for someone reaching out to an advisor is usually related to something specific, like a conversation they recently had with a colleague about how friend’s brother’s cousin was not able to retire until he was 80. While those triggers are great in that they create urgency, it had be difficult to transition that conversation into a broader one about financial well-being as a whole. Holistic financial plans are a great way to reframe that urgent need into a broader context and introduce other subjects like education funding, estate planning, and insurance.

Providing continuous value

Even among advisors who already offer plans, many limit planning to the beginning of a relationship as a “value add” during the onboarding process. While I think that is a great time to introduce planning; limiting it to this phase of the relationship can leave a ton of opportunity on the table. Advisors who regularly revisit and rework plans with their clients have a much easier time justifying their ongoing costs by providing continuous, tangible value that is independent of investment performance. Because peoples’ financial lives are not static, regularly revisiting plans also gives advisors the chance to identify additional latent needs and opportunities.

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