4 Workflows for a More Efficient Financial Planning Process
The process of financial planning can be complex, involving many client touchpoints, numerous document transfers, and unique needs for each… Read More
Insights and best practices for successful financial planning engagement
• Nancy Paul • August 12, 2021
For some clients, college tuition is the second biggest expense of their lives. And whenever an individual or family is making large expenditures like this, they want to feel comfortable and empowered with their decision.
This presents a big opportunity within college planning for financial advisors to not only deepen client relationships but also enhance financial wellness for their clients. Advisors are in a prime position to ease financial stress, steer the college money talk, introduce cost-saving strategies with a plan, and connect with the next-generation of clients.
As a mother of three, I was personally dedicated to investing many hours (upwards of 100) strategizing ways to pay for and communicate with children about college. In addition, for over a decade I have been professionally involved—authoring college planning education and working with families and financial professionals to find more money for college with merit scholarships. I am now part of The Institute for Financial Literacy in College Planning. This new entity is an education center and think tank dedicated to bringing the cost of college into the forefront of college planning, so that all families have options for how and how much they pay for college, and young people can launch happy, purposeful, and financially healthy lives.
We all likely have an understanding that college costs are rising—but do we really understand how fast and what the future cost may be? Forbes cited in a 2020 article that college tuition is rising at twice the inflation rate.1 In today’s society, college debt has been normalized. In 2021 student loan debt is now about $1.7 trillion in the U.S.2
While there are programs that will help need-based families meet the rising costs, there is a group that are beyond financial need—but not quite willing to write checks for $100K each year, for four years, or more, per child. They know the impact a college degree can have on their child’s future; however, the expected value and actual sticker price of college quite often need alignment with that particular family’s financial priorities and inherent values.
For the cost reasons alone, clients are motivated for the college money talk. Many are also concerned about their kids’ relationships with money. Clients don’t want to spend more than they have to. You don’t want your clients talking to their friends and realizing they missed out on an opportunity—whether it was starting to save early or applying for merit scholarships that are available. Your clients need options and direction.
If you haven’t started talking with your clients about the cost of college yet, start! Integrating college funding with financial planning can serve your clients more deeply for better life planning.
The College Money Talk™ is a series of strategic conversations with the entire family, starting with the parents/partners. Steered by a financial professional, this conversation is intended to uncover the family’s core beliefs and attitudes about paying for college. For example, what are the priorities—are top schools important, is a specific location or career path driving the decision? Do they understand the cost realities associated with those decisions? What is their position on children having “skin in the game”?
These questions and topics will help you begin to explore not only how clients want to fund college, but also their expectations on the strategies and commitment to do so. For instance, what’s the student’s responsibility? Are some schools worth more than others? Is the student expected to pursue merit scholarships, study for the SAT/ACT to qualify for more merit aid, or get a job to contribute?
Once parents and partners are aligned then they need to involve the kids in the discussion. It’s a family conversation about money since college is part of the whole financial plan.
College funding solutions are not created equal. Some give students financial literacy, skin in the game, life skills, and confidence so they can successfully launch. Merit scholarships, money for college based on achievement, provide opportunities for students to leverage their uniqueness to lower college costs. This includes community service, leadership, ethnicity, passions, talents, and more.
I cannot stress enough to financial professionals and families alike, The College Money Talk cannot wait. Skipping or delaying the talk has consequences—including financial stress and strained relationships between clients and their children.
With college planning, financial advisors have an opportunity to deepen client relationships, enhance financial wellness, differentiate yourselves, and increase social impact. Check out the webinar below for more tips on why The College Money Talk is so vital to your clients’ financial lives and your opportunity to become your clients’ hero.
*Please note, CE credit is not available for on-demand webinars.
Sources:
1 Sherman, Erik. “College Tuition Is Rising at Twice the Inflation Rate—While Students Learn at Home,” Forbes, August, 2020.
2 Friedman, Zack. “Student Loan Debt Statistics in 2021: A Record $1.7 Trillion,” Forbes, February, 2021.
DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.
The views and opinions expressed by this blog post guest are solely those of the guest and do not necessarily reflect the opinions of eMoney Advisor, LLC. eMoney Advisor is not responsible for the content, views or opinions presented by our guest, nor may eMoney Advisor be held liable for any actions taken by you based on the content, views or opinions of the guest.
You may also be interested in...
The process of financial planning can be complex, involving many client touchpoints, numerous document transfers, and unique needs for each… Read More
Episode Summary How can you help clients find the right balance of saving for the future while enjoying their hard-earned… Read More
Technology has become an essential part of the financial services industry. As a result, the financial technology investment firms must… Read More
Download our latest eBook and learn how top advisors are combining Fintech and FinPsych for superior client outcomes.
Download Nowa new source of expert insights for
financial professionals.Get StartedTips specific to the eMoney platform can be found in
the eMoney application, under Help, eMoney Advisor Blog.