In our ongoing mission to enhance the advisor-client dynamic, our previous Evolution of Advice research laid the groundwork for understanding key client preferences for advice delivery and what tactics contributed most to client satisfaction. We focused on pinpointing where advisors and clients align and how technology can be leveraged to exceed client expectations.  

Fast forward to today, and our newest study, “Planning Better Together,” builds on these insights. This research highlights the top “tech actions” that you, as a forward-thinking advisor, can implement to foster a truly collaborative client experience. We conducted a comprehensive online survey including 654 financial professionals and over 1,200 consumers, ranging from those already working with advisors to potential clients planning to engage within the year.  

This study offers clear, practical steps to strengthen your client partnerships by focusing on opportunities for tighter collaboration. 

Key Findings 

• Opportunity and Willingness: Approximately 50 percent of the market is either currently working with a financial professional or intends to within the next year, showcasing a strong demand for financial advice. 

• Importance of Collaboration: Seventy-eight percent of consumers want to be actively involved in the financial planning process, emphasizing the need for collaborative relationships between advisors and clients. 

• Top Collaborative Actions: We identified the top five collaborative actions within financial planning technology that most significantly enhance client engagement and understanding. 

• Client Portal Usage: Consistent use of a client portal promotes better trust, motivation, and overall satisfaction by integrating communication, task management, and financial monitoring. 

• Advantages of Collaborative Planning: Collaborative planning enhances communication, facilitates goal achievement, provides personalized experiences, builds trust, motivates clients, and demonstrates advisor value. 

Market Opportunity and The Importance of Collaboration 

The financial advisory market is ripe with opportunity, as approximately half the market is either working with a financial professional currently or plans to work with a financial professional within the next year. This indicates a robust willingness to invest in financial advice, underlining its perceived value.  

An interesting finding in our study is that the biggest market opportunity today actually lies with Millennials and Gen Z, as they most frequently reported working with an advisor or planning to in the coming year.  

Collaboration plays a vital role in the planning process for these clients, especially when using comprehensive financial planning software. A significant 78 percent of consumers express a desire to be actively involved in the process of financial planning. Advisors who can effectively collaborate with clients, in the way that clients want, can ensure better outcomes and higher satisfaction. In fact, 93 percent of highly collaborative advisors have gotten referrals from their existing clients, compared to just 60 percent of less collaborative advisors.  

To capitalize on the existing market opportunity, financial professionals must understand the ways in which clients want to collaborate with them, and have the technology in place to facilitate this collaboration. 

Top Five Collaborative Activities Identified 

Collaborative planning is all about clients and advisors working together on financial planning activities, either inside planning software or outside of it. This joint effort enhances the planning process, allowing clients to be actively involved and informed at every stage. But not every collaborative activity is the same.  

Our research pinpointed five essential activities where client demand for collaboration is outpacing advisors frequency of conducting these activities. 

The Five Key Collaborative Activities 

1. Comparing Plan Options and Stress Testing: This involves assessing various plan options to help clients visualize their preferred future, as well as conducting monte carlo analyses to ensure the plan’s resiliency. 
2. Analyzing the Current Course of Action: Here, advisors and clients review the current plan to confirm it’s on track to meet long-term goals. 
3. Demonstrating Scenarios and Competing Actions: By showing different scenarios and the impact of various choices, clients can see how their decisions shape their financial future. 
4. Reviewing Assumptions and Estimates: This step involves checking the assumptions and estimates behind the plan’s recommendations to ensure accuracy and reliability. 
5. Reviewing and Refining Recommendations: This activity involves continuously analyzing potential alternative actions and strategies based on life changes and evolving market conditions. 

Why These Activities Are Important 

Peace of Mind
Clients seek reassurance that they’re going to be ok. Activities like comparing plan options, stress testing, and analyzing current actions provide this assurance. This process helps them understand how their choices impact their financial stability, directly addressing concerns about unforeseen disruptions. 

Confidence
Clients want to understand their financial plans thoroughly. Reviewing assumptions and estimates used in recommendations gives them insight into the mechanics of their financial future. This transparency and clear explanations help alleviate anxiety about the unknown and build confidence in their financial strategy. 

Financial Security
By taking the time to review and refine recommendations, advisors show clients they are prepared for any scenario. This deepens trust and involvement in the financial journey, ensuring that clients feel secure knowing their future is safeguarded. This collaborative approach nurtures a sense of financial security, which is ultimately what clients seek—preparation for whatever life may bring. 

Empower yourself and your clients by embracing these collaborative activities, making financial planning a transparent, confident, and secure experience. 

Benefits of Collaborative Planning 

Collaborative planning, where clients and advisors work closely together, offers a range of significant benefits. This partnership fosters an environment where clients are not just passive recipients but active participants in shaping their financial future.  

Let’s break down the high-level outcomes of engaging in key collaborative activities. 

Higher Satisfaction and Referrals 

Collaborative planning demonstrably leads to higher client satisfaction. More satisfied clients are more likely to refer their advisor to others, naturally expanding the advisor’s client base. This happens because clients feel connected to the process and see the value in shared decision-making. 

Greater Understanding 

When clients are actively involved and understand their financial planning, they are naturally more content. This engagement translates to a deeper comprehension of their financial situation, alleviating uncertainties and enhancing their peace of mind. 

More Security 

Moreover, clients feel more secure about their financial future when they understand how their plan will lead them towards their goals, significantly reducing their anxiety. Also, knowing that their plans have been stress-tested and refined gives them confidence that they are well-prepared for any eventuality. 

Improved Loyalty and Trust 

Active collaboration combined with personalized advice strengthens client loyalty and trust. This relationship growth is key to long-term client retention and satisfaction. Clients who see their advisors as partners in their financial journey are more likely to stay the course and follow through with recommendations. 

Better Client Outcomes 

Clients of highly collaborative advisors enjoy better financial stability and outcomes. These advisors’ dedication to involving clients in every step ensures that plans are not only well-crafted but also robust and responsive to life’s changes. 

Highly Collaborative Advisors See Many Benefits 

Highly collaborative advisors—those who complete all five key activities—represent just 19 percent of the industry but see markedly better outcomes: 

• They have a 33-point higher likelihood of receiving referrals. 

• 61 percent report their clients have peace of mind, compared to just 41 percent of all others. 

• 68 percent say their clients have referred others to them, versus 51 percent of others. 

• 66 percent provide highly personalized plans, compared to 50 percent of others. 

By embracing a collaborative approach, you not only elevate the quality of your financial planning but also significantly boost client satisfaction, security, and loyalty. This hands-on, transparent method makes financial planning accessible, empowering both you and your clients to achieve optimal results together. 

Enhancing Outcomes Through Client Portal Use 

Client portals are an essential aspect of financial planning software that enable effective collaboration between advisors and clients. Using a client portal greatly improves several key outcomes: 

• Trust: Clients’ trust in their advisors surges, with a notable 35-point increase. 

• Motivation: Access to real-time financial data boosts clients’ motivation to achieve their financial goals. 

• Satisfaction: The portal enhances client satisfaction with their advisors, thanks to a more seamless and transparent experience. 

• Commitment: Continuous access and communication through the portal deepen clients’ commitment to their advisory relationships. 

The data shows just how significant the gap is between frequent and non-frequent portal users. 

By leveraging client portals, you empower clients and streamline complex financial processes, ultimately strengthening your advisory practice and improving client outcomes. 

Planning Better Together 

The “Planning Better Together” study underscores the immense value of collaborative planning. By actively involving clients and leveraging robust tools like client portals, advisors can significantly enhance trust, motivation, and satisfaction.  

The data is clear: collaboration not only strengthens advisor-client relationships but also leads to superior outcomes for both. Embrace these insights to empower your practice while making financial planning more transparent, engaging, and effective.  

Together, you and your clients can navigate the complexities of financial planning with confidence and clarity, achieving better results and fostering lasting loyalty. 

Source:

1. eMoney, “Planning Better Together” Research, June 2024

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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