Goals is a word that is thrown around a lot in financial planning. So much so that most of us are dead tired of it.
But what better way is there to describe the “why” behind the investment decisions we urge our clients to make?
Why do we invest our clients’ money this way or that if not in the pursuit of one of their high priority goals?
Goals, milestones, financial achievements—whatever name you give them—are critical to your clients’ success. While potential returns may be enough to motivate some clients, it is not the case for most.
Psychology has found that clients are far more disciplined and ultimately more successful when personal financial goals are attached to (and steer) the investment ship. If a client can’t answer the question “why am I doing this?” with certainty at any point in their planning journey, they are less likely to continue the path to reach their goals.
You see, to your client, comprehensive planning is about so much more than a rate of return. It is about using their money to achieve something greater; helping to pay for their daughter’s wedding, sending their grandkids to their alma mater, leaving a legacy of wealth behind for posterity.
The returns are just a means to an end, and that end always needs to be in sight. But, in a world constantly bombarding us with information, it can be easy for clients to get distracted from the big picture.
As an advisor, how are you going to overcome that and help facilitate the realization of your clients’ goals?
Certainly, a paper financial plan isn’t going to do the trick.
Financial advisors have always added value to their clients by keeping them on track to reach their financial goals, but how that is accomplished in today’s world looks and feels far different than it has in the past. This is in part due to the changes that technology has made to our way of life and in part due to human nature.
But whichever way you swing it, what we do know with certainty is this: financial planning has changed.
Gone are the days of a financial plan being hard copy printed with little ability to adjust in real-time based on life events or economic conditions.
Gone are the days of financial planning being a one and done activity.
Today’s client is different, and so are his or her needs.
Today’s client needs a living, breathing plan that can be updated, adjusted, or completely reconfigured if needed. They need a plan that is designed to help them stay focused and make more informed decisions with their money. They need a plan that is at least as sophisticated as the apps they use to teach their children about money.
And they need this from you—their financial advisor—now!
What’s the “next step”?
Life moves fast and our worlds are constantly changing.
All of us, all of our lives, are just one big work in progress. One minute we’re in our twenties taking wild vacations and hanging with our friends, and the next we’re sending our children off to college.
As we move through these different stages of life, our financial planning needs, and goals, can drastically change.
From marriage to divorce, ending one career and beginning another, there are any number of circumstances that influence the way we spend, save, and invest our money.
Early in life, paying off student loans, buying your first home, and opening a 529 plan may take precedence over generating investment income, saving for retirement, or mitigating taxes.
Neither of these goals is less important than another—objectively speaking—but some will hold higher place values at different inflection points. It’s imperative that the client can see how the financial plan is adapting to fit their new circumstances.
Like us, our financial plans should also be a work in progress.
Shifting with the Times
The goal for advisors in today’s world, then, is to facilitate dynamic, ongoing planning conversations that can shift as quickly as life does.
To have transparent, flexible, and easily accessible financial plans that work and operate the same way the rest of our lives do, on demand.
If we can order our groceries online and have them delivered in under two hours, check our heart rates and oxygen saturation on our watches, why can’t we check on the progress we’re making toward sophisticated financial goals in real time?
In this evolving economy and culture, today’s financial plan calls for new strategies and customized solutions that enable clients to be engaged in the process.
Be a part of the solution.
Disclosure: This information is prepared for general information only and should not be considered as individual investment advice nor as a solicitation to buy or offer to sell any securities. This material does not constitute any representation as to the suitability or appropriateness of any investment advisory program or security. Please visit our FULL DISCLOSURE page.