Financial planning isn’t just about investing someone’s money: it’s a process that includes many stressful client emotions, says Al Nagy, regional director at Investors Group Inc. in Edmonton.
Clients often feel overwhelmed by the sophistication of the financial planning process and stress is often triggered by emotional concerns related to money. “That trigger makes some people reluctant to sit down and actually delve into deep issues,” Nagy says.
“If you can say to them, ‘let me take this burden off your shoulders and provide you with the answer that you’re looking for, and be your guide going forward,’ that opens up your clients and results in a great relationship.”
Here are three ways to help clients reduce the stress of financial planning:
1. Engage clients in the process
“The only true way to know the answers to any of the problems presented during the discovery meeting is to complete a financial plan,” Nagy says.
Provide clarity by helping clients visualize their plan with financial planning samples. If clients can see the benefits of a formal financial plan that’s written out for them, they are more likely to provide you with key information needed for the process.
2. Emphasize key messaging
Make sure to deliver the message that financial planning isn’t just about investing, Nagy says. Rather than telling clients that they need a particular amount of life insurance, you can ask a series of “what if” questions that focus on financial preparation for life-changing events.
Direct questions that require clients to imagine a particular scenario often motivate clients to be more forthcoming. Nagy suggests asking clients if they know how much money it would take to retire comfortably for 30 years, or how they feel about the amount of tax they’re paying.
“Those are the kinds of questions that prompt very open, honest answers, and it gets people thinking,” he adds. You never want to say, ‘you need to do this or else.'”
3. Provide more than investing advice
It’s important that advisors present clients with choices and possible solutions to a full range of their financial planning issues, as opposed to providing only investment advice, Nagy says.
“It’s easy for advisors to quickly take that cheque and go on to the next client, but that’s doesn’t really work because the focus becomes strictly on the rate of return rather than providing solutions for a multitude of holistic planning issues,” Nagy adds.