The conversations clients are having with financial advisors today have evolved.
Today roughly four in 10 pre-retirees with more than $500,000 in assets aren't even working with a financial advisor (1). Some affluent investors are making trades on do-it-yourself platforms online, and even clients who use advisors are often doing some investment research on their own.
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Meanwhile clients are living longer and juggling multiple financial priorities. Among families with teens, three-fourths say they would dip into retirement savings to pay for a child's college education (2).
So how do you distinguish yourself in this environment and prove that your expertise is worth your clients' and prospects' loyalty?
Three roles of financial advisors of the future
Advisors who thrive in this new age of advice will understand the needs of each generation of a client's family. After all, a client's spouse, children, parents and sibling will all influence where your client's money goes.
“The business of financial advice has changed. Your client is now a family,” says Joseph Coughlin, director of the Massachusetts Institute of Technology AgeLab.
Coughlin says today's most valuable advisors will fill three key roles:
Advisor as educator
No more advisors telling clients what to do. The new model is for shared learning, with advisors who are educators who can make clients smarter and empower them to make the right decisions.
Advisor as connector
The financial advisor will serve as a hub, connecting clients to banks, caregiving resources, home improvement contractors and other services that they may not even realize they will need in the future for themselves and their families.
Part of an advisor's worth comes from simplifying the complex and giving clients time back. One way to do that is by connecting clients to resources for all areas of their financial lives.
Advisor as partner in financial planning
If retail channels and websites are providing advice to the mass affluent, the personal relationship that high net worth clients are seeking could become the value add.
Say your client's child, Morgan, has just finished graduate school in Connecticut and is looking to buy a home. Any free online calculator can help Morgan determine what an affordable monthly mortgage payment would be. But if you're a trusted advisor who knows that Morgan's real dream is to live overseas before age 30, you could help Morgan figure out whether it makes more sense to rent.
An advisor who can help clients save money can be just as valuable and trusted as one who can grow a client's assets.
For eGuides on serving women, connecting with Millennials to Baby Boomers, and more topics on serving clients' families well as a trusted advisor, check out the Your Client Is Now a Family toolkit.
www.newageofadvice.com/yourclient
Stay on top of the new conversations to have with clients:
www.newageofadvice.com/changing-conversation/your-client-now-family
(1)“LIMRA Retirement Study – Consumer Phase,” 2012
(2)“How America Saves for College 2013”
Want to comment on this article? Catherine Tsai is a Denver-based writer and idea wrangler for Transamerica's New Age of Advice. Email her at ctsai@transamerica.com
Disclosure:
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker-dealers. Transamerica Resources, Inc. does not offer insurance products or securities. This material is provided for informational purposes only and should not be construed as insurance, securities, ERISA, tax, investment or legal advice. Although care has been taken in preparing this material and presenting it accurately, Transamerica Resources, Inc. disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it. Interested parties must consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here.
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