Financial Advisors

Money doesn’t buy happiness, but it certainly can’t hurt. Much of our lives revolve around money to achieve a level of comfort and a sense of security. Why, then, are we so financially illiterate?

The 2020 TIAA Institute-Global Financial Literacy Excellence Center (GFLEC) Personal Finance Index reported that respondents answered only 52% of personal finance questions correctly. Although this score has increased by three percentage points since 2017, there is still a lot to learn and people are eager to do it. It is from this growing pursuit of financial literacy that the rise of financial coaching stems.

Occupy two roles: advisor and coach

Over the years, the role of the modern financial advisor has evolved from financial management only to that of a financial coach focusing on advice. Potential clients seek to understand budgeting, creating emergency funds, and paying off debt long before they are ready to have detailed planning discussions. Financial advisors who establish themselves as trusted sources for these concepts build relationships that can grow over time to include in-depth financial planning discussions.

Additionally, advisors are licensed professionals who can provide recommendations and advice (unlike financial coaches who don’t need certifications). In the short term, clients can rest assured that their advisor is preparing them to accumulate wealth so they can eventually build a larger financial strategy together.

If you’re already in both roles (advisor and coach), how can you make the most of changing client expectations? My advice: play to your strengths.

Differentiate your business as a financial coach

Advisors and wealth managers often struggle to make their services stand out from the crowd, which doesn’t make it easy when it comes to capturing the attention of potential clients and building customer loyalty. Many advisors are building relationships by developing financial coaching strategies that help potential clients position themselves to create wealth, such as content creation. For example, writing microblogs about healthy financial habits can attract the attention of people who want to improve their financial knowledge.

By educating your target market about personal finance, you can demonstrate your financial knowledge to build trust and build credibility. This process can pave the way for wealth-building conversations that turn potential customers into loyal customers.

How can advisors navigate the new realities of retirement planning?

An easy way to transition from coach to advisor can be to have a conversation about one of the financial topics that many people are concerned about: saving for retirement. While retirement planning can seem complex and time-consuming, NaviPlan’s Guided Retirement tool uses smart assumptions to produce a financial needs analysis using just one data point: income. By simplifying this process for advisors while focusing on creating accurate analytics with compelling visuals, Guided Retirement can easily demonstrate the value of working with a financial advisor.

Another piece of planning technology that can support your financial coaching strategy is the use of an interactive client portal. This tool can help speed up the onboarding process, provide clients with 24/7 access to their financial plans, and allow clients to model contribution and due date changes to see how these adjustments affect their Goals. The NaviPlan Client Portal allows clients to deepen their understanding of financial goals and explore the impact their decisions can have on their success.

The value of a financial education

Financial coaching boils down to educating people on healthy financial habits. Advisors who have positioned themselves as a go-to source of financial knowledge are better positioned to convert investment-ready clients and grow the wealth they have built. On top of that, your fintech can help simplify the process of acquiring new clients by showing the great value that moving from a coach-to-advisor relationship can create.

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