Financial advising clients are breaking up with providers and trying out new ones with the speed of a dating game show.
In fact, 54 percent of people left their advisor in 2023 according to a YCharts survey.1
There’s a lot of heartache right now. But this also creates opportunities for planners and advisors who know how to navigate the competitive landscape and come away with a rose.
And the key — as it usually is with relationships — is communication and engagement.
The same study found that clients want more engagement — engagement that is frequent, insightful, and personalized. Here are three ways you can increase client engagement and grow your business.
1. Extend your “office hours” with a client portal.
People have grown accustomed to being able to do things online, and financial planning is no different. It seems like everyone is on a time crunch these days, and clients want to provide documents before they see you so that you can both be prepared for your meeting. With a client portal, clients can add their documents securely, eliminating the temptation to email you their PII.
For even quicker, and more up-to-date information sharing, implement account aggregation in your client portal. That way, all clients need to do is input their information, and occasionally reauthenticate. By offering this option right in your client portal, you make the process simple and accessible for all, so that you can focus on your relationship with the client. And part of that relationship is educating them in the way they learn best.
2. Educate your clients in the way they learn best.
Research has shown a positive correlation between financial literacy and increased assets saved for retirement. In fact, over 80 percent of people who rated themselves highly knowledgeable about finances had savings over $100,000.2
And that’s not all. Research has also shown that financial jargon increases anxiety surrounding the client’s experience with a financial advisor, making him or her less likely to seek financial advice.3
In other words, the best thing you can do for your clients and prospects alike is educate them about their finances. But how do you help them overcome the confusion and anxiety around learning about finances? Present it to them in the way they learn best.
For example, if your clients are visual learners, instead of a spreadsheet, show them a Monte Carlo graph so that they can easily understand the likelihood their saving habits will provide their desired retirement. By illustrating outcomes visually, clients connect their current reality to their desired future.
3. Empower clients to face their financial fears.
Anxiety related to financial literacy is not the only source of fear for clients. Almost 70 percent of people reported the economy in a post-pandemic world is a major source of stress.4 Uncertainty is a major source of anxiety for many. To assuage these fears, you can do more than tell clients what might happen to their portfolios in the face of a global event like another pandemic or a situation like the 1994 fed hike: you can show them. With a portfolio visualization tool, you can simulate exactly what would happen if they had investments in past economic climates, allowing them to prepare for the worst-case scenario.
The new Moneytree platform is here to help
Our new Moneytree solution empowers you to communicate more effectively with clients in three different ways.
- Our comprehensive software allows you to work faster, so that you can devote more time to communication.
- Our best-in-class features, such as our popular one-page reports, our market-leading Monte Carlo, our client portal, and our what-if tool, make it easy to explain complex topics.
- Our one-of-a-kind audit trail helps you answer questions, provide consultation, and build trust through transparency.
Engage clients more effectively and nurture trust with the new Moneytree.
1https://www.wealthmanagement.com/industry/ycharts-clients-ditched-advisors-alarming-rates-2023
2https://www.theamericancollege.edu/knowledge-hub/press/study-finds-that-improving-financial-literacy-supports-retirement-wellness-and-confidence
3Gerrans, Paul & Hershey, Douglas. (2016). Financial Adviser Anxiety, Financial Literacy, and Financial Advice Seeking. Journal of Consumer Affairs. 51. 10.1111/joca.12120.
4https://www.apa.org/news/press/releases/stress/2022/concerned-future-inflation#:~:text=Inflation%20was%20reported%20as%20a,%25)%20and%20money%20(66%25)
