The Value of Adding Comprehensive Financial Planning to Your Existing Firm

Often, the  immediate association of financial planning is planning for retirement or investing. It is true that these are both important areas of financial planning, but there are several other aspects of financial planning than can be provided to clients to build a comprehensive financial planning offering that adds both client value and increases your practice’s value proposition to remain competitive in the market for wealth management services.



Step Out of the Battle for Higher Returns and Lower Fees

Currently, one of the major issues facing traditional wealth management and investment companies is the emergence of robo advising and the trend towards passive investing. These trends are allowing current and potential clients to rethink the fees associated with active investment advisors and hands-on wealth management, because it is a fact that similar returns can be achieved for less elsewhere.

These facts are undeniable.

In the investment world, there is always a cheaper option or another firm offering higher returns. During times such as this, it is crucial to continue to demonstrate value to clients and show that wealth managers can provide more than just high investment returns to remain competitive.

By adding a financial planning offering to your practice, you can start to build a value proposition that does not hinge on being able to get the highest returns, but instead focuses on ensuring that clients are on the right path financially. Being able to address a client’s burning financial question can not only provide a sense of calm and order that all clients desire, but at times justify the fee you are charging by saving a client more than they are paying.

For example, being able to tell a client whether they actually need their current life insurance policy or noticing that they have not accurately captured their cost basis in their retirement account can amount to huge savings for the client. That is the definition of providing both great value and good service!

Increase Your Ability to Make Investment Decisions that Fit Client Need

Despite the concept that a comprehensive financial planning offering can help alleviate pressure to be the lowest cost advisor with the highest investment returns, clients are still highly interested in getting good investment returns, but how good is good enough?

By meeting with a client to not only determine their ultimate investment goals, but setting yourself up as the resource that is willing to look at all of their accounts to truly determine if they are on track to meet their goals is a position that can make your practice much more valuable to the client.

Often, investment decisions are made considering only the assets that an individual practice is managing, opening the door for a client’s full portfolio to be overweight in specific company stocks and/or industries, or having a portfolio that is overall too aggressive or too conservative to meet all of their goals.

By offering to review all of the client’s accounts to show their total asset allocation can be very enlightening to both the advisor and the client and allows the advisor to make better investment decisions, because they are much more in tune with the client’s full financial picture.

Establish a Deeper Relationship with the Client

Another aspect of the wealth management world that is undisputed is that it is a relationship driven business. Clients are much more likely to invest with firms and advisors that they feel confident and comfortable with. What better way to establish a strong relationship, than to be a resource during times of great need or confusion!

Financial planning offers advisors the ability to support clients during such times and to truly be in tune with the happenings in their client’s lives. Helping to determine which type of education funding vehicles are appropriate to fulfill a client’s wish to pay for a child or grandchild’s education, diagraming a client’s will and powers of attorney to ensure that they align with how they want their assets transferred at their death or incapacitation, creating a long-term cash flow model to ensure that their asset level and investment returns as a whole has them on track to retire are just a few analyses that not only provide immense value, but also shows that the advisor is truly concerned with the overall goals of their client and can actively help them achieve them.

Open the Door to Multi-Generational Wealth Management

Being more in tune with a client’s life offers the additional benefit that it can lead to building a hedge against asset loss due to the generational wealth transfer that is occurring rapidly. It is possible to get to know your client’s children and grandchildren prior to their inheritance of wealth and establish a relationship that goes beyond your client’s generation.

If your client mentions that their child is not sure if they can afford to go to graduate school or is unsure of how to fund it, you can offer to run a long-term cash flow model to help ease their mind and provide some suggestions of college funding options available to them.

Generally, providing this type of analysis for a younger client does not require a complex level of financial planning as they are still in the asset accumulation phase, but being able to get in front of a potential client and establishing your practice as a competent and caring provider of financial advice prior to the client truly needing your services forms a bond that can give you a leg up on the competition when a child or grandchild of a client is searching for options to manage their newfound wealth later on.

Adding comprehensive financial planning to your practice does not have to be overly complicated, but can grow organically from working to become a resource to help clients to find solutions to all of their financial decisions, not only retirement planning and investing.

Taking the initiative to add such product offerings to your practice, can not only build a competitive advantage for your firm, but can make the difference between standing out as a value added investment versus a ubiquitous wealth management operation that is slowly being left behind in the ever-changing finance industry.

Did you know that you could outsource your financial planning tasks?

Take a look at some of our virtual paraplanners ready to bring comprehensive financial planning to your firm.