There is a wide disconnect today in the wealth management industry when it comes to the personalization of financial plans. Almost all planners agree that personalization is important.¹ However, six in ten consumers report that personalization is lacking in their financial advice relationships.² More concerning, consumers feel that the financial advice they’re receiving is not helping them feel more at ease or more in control of their finances.¹

With 95 percent of financial professionals expecting growth in holistic financial planning over the next five years—it’s important to understand what personalization really means to clients.¹

Uncovering the Personalization Disconnect

Advisors generally seem to be in alignment with client preferences, as many of them believe the industry is moving away from basic asset management and towards holistic financial plans that are personalized for wealth management clients.³

When asked, financial professionals widely defined personalization as customizing plans to each client’s specific goals.³ This appears to be the heart of the disconnect. Financial professionals seem to be strictly looking at monetary goals, whereas top client goals go beyond monetary considerations as they also seek to eliminate financial stress.⁴

In fact, 72 percent of consumers reported that having a financial planner who understands their financial stress and works with them to find ways to lessen it, is the most important aspect of personalization. This includes factoring in all the client’s life circumstances, both financial and non-financial.⁴

Additionally, consumers across all demographic backgrounds mentioned budgeting—especially in reference to mitigating the impact of economic volatility—as a top priority for personalization. Consumers are worried about their financial future, they have reined in spending and are following a budget more closely, even though in many cases this is resulting in less of their money going towards savings.⁴

Financial professionals need to understand that a client cannot begin to achieve their longer-term financial goals if they can’t conquer the day-to-day finances that are causing them stress. So, how does a financial planner get to the heart of what their clients want in a personalized financial plan?

Getting Personal with Clients

As financial planning digs deeper into personal lives, emotions are likely to arise. Talking about money is hard—talking about the emotions that money evokes is even harder.

Financial professionals state they are ready to take on this shift in client demand for more personal conversations, but research into the types of difficult conversations a planner may have to facilitate tells a different story.

When asked if they are able to have difficult and uncomfortable conversations with their clients, 88 percent of respondents agreed that they are.³ However, research shows that they are uncomfortable with several topics, including significant health issues or serious illness, divorce, and premarital planning, with only eight percent of advisors saying they are very comfortable with these discussions.¹

How personal can a financial plan be if financial professionals are struggling to have tough personal conversations? This gap in addressing clients’ personal needs likely contributes to the personalization disconnect.

Aligning Personalization Efforts Between Client and Advisor

To address the personalization disconnect, financial professionals first need to understand that clients tend to view negative life events with a far more positive perspective than they may anticipate. Our research found that there is nothing so negative that individuals cannot look back on it with a positive perspective.⁵

Bridging the personalization gap will enhance the quality of any financial plan and can be accomplished through several means.

Personalization Through the Whole Planning Process

We found that advisors do acknowledge the need to personalize the planning experience from the start, with most focusing on initial client interactions as being the most important step. But once a plan is established, the remaining steps in the financial planning process become more standardized.

Clients experience continual change throughout their lives. If personalized conversations are only happening at the beginning of the advisor-client relationship, how are those changes accounted for in the client’s financial plan?

Begin with understanding—your financial planning clients want to work with someone who understands them as individuals, not as numbers or as lumped into demographic groups. One of the best ways to achieve understanding is by continuously asking the right questions and then being a good listener.

There are two ways to start, simply state “tell me more” and “have we covered everything you were hoping to talk about today.” Asking to hear more prompts the client to think further, but also signals that you are there to listen and allows them to lead the conversation about their financial life. Asking if everything has been addressed allows the client to confirm and conclude rather than assuming everything has been discussed.

Don’t be afraid to ask personal questions that get at the heart of what your clients want out of the financial planning experience. And don’t just focus on things like having a secure retirement or leaving a legacy. Talk to them about what keeps them up at night. Hone in on their level of financial anxiety and work to uncover what is causing it and then seek to educate the client on how a sound financial plan that is prepared to address these concerns can help alleviate their financial stress.

Holistic Planning for All Client Needs

If you are among the financial planners who view holistic financial planning as the future of the industry, talk to clients about what services they expect from you. Being a holistic planner could involve anything from increasing the number of financial services you offer to expanding your practice to include life-stage financial planning, values-based planning, and total client well-being. Ultimately, you want to provide the type of service that allows your clients to stop worrying about their finances so they can focus on other things.

Cash Flow Planning and Budgeting for What Clients Want

Adding cash flow analysis and budgeting scenarios into your financial plans will empower your clients to take control of their personal finances by developing better personal financial habits. By using budgeting scenarios to show clients how they can productively direct any extra savings they accrue, you’re providing personal finance guidance and insight that strengthens the holistic service you deliver.

Client Portals for a Better Experience

Using technology can also help ease clients’ financial concerns. While some may think of technology as impersonal, research indicates that clients view it as a means to connect more easily and more authentically with their financial planner.⁵

With an interactive client portal, clients can view their financial situation in real-time. These tools allow clients to track their progress toward goals, review investment performance, access reports, and financial education, and reach out directly to their financial planner with questions or concerns. Additionally, a portal lets clients experiment with timing, contributions, and other factors to see how changes could affect their progress.

Client portals can also be used to aggregate their full financial lives when they upload information from outside accounts with other institutions. This ability to keep track of all accounts in one location not only simplifies clients’ management of their personal finances but can also ease their stress by giving them a means to quickly and easily see where their money is at a moment’s notice.

Staying On Top of What’s Important to Your Clients

A client’s life can change in an instant. Financial professionals should strive to cultivate the kind of relationship where clients will reach out when those changes happen, but at the very least, it’s important to ask them each time you see them.

Begin each meeting or check-in by asking what’s new or changed in your client’s life. It could be directly related to money or financial goals, but it could be more personal like health or relationship changes. Leading with the right types of thoughtful questions will get you much closer to ensuring the advice and solutions you offer meets the client’s expectations of personalized service.

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.

Sources:

¹ eMoney Leading with Planning Research, May 2022, Advisors n=360

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

³ eMoney Evolution of Advice Research, July 2022, Advisors n=300

⁴ eMoney Consumer Pulse Survey, July 2022, n= 1,201

⁵ eMoney Planning with Purpose Research, July 2021, Advisors n=393, End clients n=391

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