Advisors, Are You Evolving with the Industry?
Dear Advisors,
I believe that financial planning is undergoing a new, powerful phase of its evolution, and I’m pivoting my operation to get in on that early. I believe that the future of financial planning, at least as it applies to small, independent registered investment advisors (RIAs), will divide itself into more focused services that serve various niches as a powerful value-add.
If we posit that the definition of a financial plan changes over time, what should it become? What would be your ideal reality for financial planning that would make you adopt it for yourself, your family, and your business? Unless we identify that and take actionable steps to pursue it, we will not be able to break free of restrictive attitudes the way we want to.
In light of the need to redefine financial planning as a part of personal and professional growth, here are three questions I think every advisor should ask themselves to make sure you evolve with an ever changing industry.
Question #1: What is my personal definition of financial planning and how can it grow?
According to the Financial Planning Review, “Financial planning is defined as a collaborative process between a client and a financial advisor that integrates relevant aspects of the client's financial and personal circumstances to maximize that person's ability to meet life goals. (...) So, rather than viewing financial planning as a practice approach or even an offshoot of one academic discipline, financial planning today should be seen as the expression of numerous intellectual pursuits. Essentially, financial planning can be viewed as a multidisciplinary field of study that is captured by indicator fields of study and pragmatic client approaches.”
Based on that definition, I see possibilities for many different types of financial plans. When we get into the rhythms of our profession and routine, we may put financial planning in a box without even realizing it! These alternative financial plans present so many options when it comes to the cost of those plans, the number of meetings with the client, and of course, what is discussed during those meetings. There is potential for this approach to be much more useful to the client’s financial goals than the traditional financial plan.
Question #2: What alternative financial planning should I consider adding to my practice?
As you consider redefining financial planning, it’s important to familiarize yourself with alternative financial planning options out there. Advisors can charge for including options such as:
Family meetings
Estate plan implementation
Grief counseling
Life planning
Marriage counseling
Technology consulting
Exit coaching
Business coaching
Implementing alternatives such as these can be an open door to clients that might not pursue financial planning otherwise. One of my advisor friends has a lot of retired clients who are essentially aging out of needing or wanting financial planning. Recognizing that, she is implementing other financial planning packages like estate plan implementation and longevity planning. She charges about the same as she does for a traditional financial plan, has about the same number of calls, requires the same CFP-level of knowledge to implement, but meets her clients’ needs so much better.
Another great example is life planning. I’ve heard that life planning takes several meetings with clients to get real value from it, which makes it not feasible to implement unless you charge clients for it. That would make life planning a prologue to the financial plan, to help the client articulate their values and goals to make the plan more accurate and actionable.
Question #3: How can I grow personally and professionally through alternative financial planning?
I believe self reflection is an integral part of personal growth. If you are resistant to the idea of exploring alternative financial planning, it is a good idea to ask yourself why. Do you have questions that need to be answered?
Make an action plan to research and explore alternative financial planning and see what resounds with you. Are you intrigued, but feel overwhelmed? Maybe you need to add quarterly goals to pursue further training and credentials. Are you not convinced these things would be a value add to your clients? Take a moment to really search out those emotions and put yourself in your clients’ shoes.
What opportunities for growth and impact could you be missing out on by holding onto a traditional view of financial planning? In an ever changing industry, I believe it is critical to continue to adapt or else we have the real risk of falling behind the times as a new generation enters the workforce.
Am I going to go so far as to say that we’re doing the industry a disservice by not offering alternative financial plans? Yes. As a consumer of financial planning myself, I’ve been frustrated that the options for financial planning include only traditional financial planning with an advisor, or going to see my counselor in therapy. From the client’s perspective, I can come to you, my advisor, for deeper discussions that solve more of my problems. This framework benefits the client, and the only thing standing between us and better helping our clients is providing a framework to deliver these alternative services.
Along the way, I’ve found growth in my knowledge of myself, my and my partner’s financial life, and my capabilities and offerings as a financial planner to see what people actually need in what we’ve traditionally called “financial planning.” I’m excited to bring my knowledge and expertise to push the evolution of financial planning to include alternative planning methods to meet my clients’ unique needs as they develop.
Warm regards,
Brooklyn
P.S.
At Ellevate Advisors, we believe that advisors deserve to retire too. What does that look like for you, your family, and your business? Let’s figure it out together! Check out our services here, our new products page here, or get to know me on my bio here!