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Now Is the Time for a Renewed Focus on Planning

Joe Buhrmann November 21, 2023

Two financial advisors collaborate during a meeting.

Inflation, increasing cost of living expenses, and market volatility are just a few of the factors that are making finances top of mind for Americans today. Many consumers are now feeling a growing sense of urgency around the need to plan for the future. Research has found that1:

  • 58 percent of Americans are thinking more about how future events may affect them and are placing greater importance on long-term planning.
  • 55 percent are paying more attention to how they spend and manage their money.
  • 33 percent say they are “more motivated to plan for tomorrow”.

This new sense of urgency brings a desire for support from financial professionals. Seventy percent of those surveyed said that working with a financial professional in the next year is a priority for them. Of those who have a financial professional already, 58 percent wish to now work more closely with them. 1

With investors anxious about the future and looking for advice, now is the time for financial professionals to make planning the center of their businesses.

The Growing Market for Financial Planning

The underlying demand for financial advice is growing and it’s not exclusive to high-net-worth individuals. We estimate that there are 88 million households across the U.S. that are seeking advice and guidance from a financial professional. And there’s a lot of work to do. These households face a number of financial challenges2:

  • Two thirds of them don’t have a financial plan.
  • Only forty percent are highly satisfied with their current advice/guidance.
  • Nearly half describe their relationship with finances with words such as stressful, worried, overwhelmed, insecure, frustrating, or unprepared.
  • Only one third feel good about how much money they’ve tucked away so far and their ability to select investments.

This presents a major opportunity for financial professionals to create a business plan to expand their planning services. From established baby boomers to younger generations just starting to explore their options, everyone needs help with basic planning.

Leveraging Financial Planning As Your Growth Engine

Introducing financial planning into your practice or expanding the planning you are already doing is a powerful way to grow your business. Most advisors agree that one of the benefits of offering financial planning is that it is a differentiator, with 85 percent saying it offers a competitive advantage.3 And your prospective clients agree.

Recently, I was working with a large advisory team and one advisor shared an anecdote with me. They had an interaction with a prospective client whose current advisor was delivering investment performance that was knocking it out of the park. This advisor knew they couldn’t beat that performance. What they could beat, though, was the planning. The client easily saw the bench strength they got by moving beyond investment management and getting help navigating strategies for retirement, taxes, businesses succession, and legacy planning.

Your clients are now looking for their financial advisor to do more than just investment management. They want a holistic financial planner who can help improve their overall financial wellness by looking at all aspects of their financial lives. Offering the financial planning services that prospective clients are looking for will help you provide a better client experience, expand your client base, and grow your practice.

Put in More Effort for More Results

Planning adds to your bottom line by enabling you to augment your revenue streams with additional product and solution sales and increased advisory fee revenue. As you consider expanding your financial planning services, keep in mind that the effort you put in will directly impact the tangible rewards you’ll reap from planning.

Advisors who created one to two plans per month saw about a three percent boost to their production in terms of commission and advisory fees.4 This modest investment in planning only delivers modest results. To receive bigger returns on your time and investment, make your planning platform the center of how you do business.

Advisors who produced two to four financial plans a month saw 132 percent higher gross dealer concession (GDC) than those who only produced one to two plans.4 By working with two to four clients a month (or a few dozen a year) to update existing plans or develop new plans, you can see more than double the commission and advisory business than those who don’t fully adopt planning.

Prepare to Expand Your Financial Planning Services

With clients from every walk of life seeking guidance to achieve their financial goals, expanding your financial planning services is a worthwhile investment of time and resources.

Download our ebook From Portfolio Manager to Financial Planner: Using the Data You Have to Evolve Your Business and Client Relationships to learn how you can use key data points, technology, and repeatable workflows to expand your financial planning efforts and grow your business.

Sources:

1. Moving Forward: Planning for the future in changing times. AIG. February 2022.

2. eMoney 88 Million Consumer Research Study. April 2022. n=1,616.

3. Fidelity Financial Planning Survey. May 2020

4. Kehrer Research and Consulting. “The ROI of Financial Planning: The Impact of Additional Planning on Individual Advisor Production.” 2019.

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.

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About the Author

Joe serves as a Senior Financial Planning Practice Management Consultant at eMoney Advisor. With more than three decades in the financial services industry, Joe aligns his know-how and passion to help firms of all sizes increase usage, adoption, and engagement through a modern financial planning experience. He leverages his expertise and supports internal departments across the enterprise, helping Communications, Marketing, Relationship Management, and Sales. Joe attended Illinois State University, where he received his bachelor’s degree in Applied Computer Science and his MBA.

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