Planning can build client trust, address lingering issues
by October 10, 2018 10:09 am 165 views
About 93% of financial planning specialists consider stronger client relationships a significant benefit of financial planning, according to Cerulli Associates, a global research and consulting company. Planning leads to deeper conversations about clients’ financial lives and where they see themselves in the future. This approach builds trust that’s not easily lost in a market downturn.
“A key value of financial planning is its likelihood to aid client retention,” said Marina Shtyrkov, research analyst at Cerulli. “Advisers who can skillfully and compassionately guide clients through emotional financial decisions stand to profit with strong, loyal client relationships.”
Also, planning uncovers gaps in clients’ financial lives that have not been addressed. “There are some subjects that clients have long neglected or purposefully avoided because they are uncomfortable to raise,” Shtyrkov said. Planning can give clients an opportunity to address lingering issues, and advisers who can lead their clients through the process can build trust along the way.
“Recognizing these benefits, advisers continue to add or expand financial planning services,” Shtyrkov said. “In 2013, advisers offered comprehensive, ongoing planning advice to one-third of their clients. By 2017, that number had risen to nearly half. In addition to competitive pressures, investor awareness of financial planning is also a driver of this trend. Close to two-thirds (64%) of advisers agree or strongly agree that client demand for planning is increasing.
“While offering planning to clients can differentiate advisers from lower-cost, digital investment management platforms and engender client loyalty, advisers must be prudent in how they expand their services. Client segmentation and pricing structures can help practices remain efficient and profitable as they broaden their service net.”
More on the topic is available in the October 2018 issue of The Cerulli Edge — U.S. Asset and Wealth Management Edition, which looks into strategies for increased asset retention by identifying underserved clients or missed opportunities.