Executive Summary
One of the key steps in the financial planning process is presenting the plan to the client, which has traditionally been done as part of a single 'plan presentation' meeting that takes place once the advisor has gathered and analyzed all of the client's data. While this approach may have made sense in a time when the 'plan' itself was mostly limited to investment recommendations (which the advisor would be able to go on and implement themselves since they were managing the client's assets), financial planning has come to cover more and more areas of clients' lives, with a widening breadth of financial planning recommendations in kind – to the extent that trying to cover the entire plan in 1 session can result in an exhausting and overwhelming ordeal for both the client and the advisor.
In this article, Kitces Senior Research Nerd Meghaan Lurtz writes about what the most recent Kitces Research study on Advisor Productivity reveals about how advisors deal with the challenge of delivering more and more information to clients, and how it's possible to keep clients engaged in the process of presenting financial plans… without resorting to longer planning meetings.
As the latest Kitces Research reveals, advisors are increasingly turning to collaborative financial planning software, which – at least in theory – can help to keep clients engaged by turning the planning meeting into a back-and-forth discussion versus a 1-sided lecture. However, the danger of relying on software to facilitate collaborative financial planning is that if either the advisor or the client isn't familiar enough with the software to leverage its features, the software can instead be a blocking point for the advisor in delivering the information (making it less likely for the client to implement the advice, since they may not fully understand it in the first place) while eating up valuable meeting time focused on the technology… and not the client or their plan.
One approach that can help create a more engaging and productive plan presentation is to 'flip' the meeting so that some (or most) of the information is presented in advance rather than during the meeting itself. By sending meeting materials (including recommendations) in advance up front, clients can absorb and reflect on the information on their own time, freeing up meeting time to focus on questions the client has (which will presumably be more thoughtful and relevant after spending some time to think about them, versus 'on-the-spot' questions that arise immediately after the advisor presents the information). Not only can sending user-friendly materials (such as short video clips recorded in apps such as Loom) help clients better engage with the financial planning recommendations, but they can also help clients establish a baseline knowledge of the technology required for key analyses (e.g., Monte Carlo analysis) that might otherwise be difficult to understand when first encountered in a plan presentation meeting. This allows the advisor to focus on the client's plan and recommendations instead of on how the tech is used.
Ultimately, sending planning and educational materials to clients in advance helps advisors transform the plan 'presentation' meeting into a plan 'engagement' meeting. And because materials sent in advance only need to cover the basics, they don't necessarily need to be personalized – meaning that the advisor can create a handful of broadly applicable videos to use over and over again to educate clients before diving into the details in the meeting itself. The net outcome, then, can be not only to reduce the amount of time needed for meetings themselves, but also to make the time spent in the meeting more engaging and valuable for the client!
When Advisors Feel Overwhelmed By Too Much Material To Cover In Plan Presentation Meetings
When advisors feel compelled to cover everything in a client's financial plan in 1 presentation meeting, meetings can become very long and very difficult – for both advisors and clients. And with the increasing breadth and depth of many financial plans being presented (which tend to keep growing as advisors find more topics of interest to help their clients), financial advicers who feel obligated by their fiduciary duty to cover all parts of their client's financial plan are often finding it difficult to conduct relevant and engaging plan presentation meetings.
This is because there is often so much covered in a client's plan that the advisor would actually need at least 3 or 4 meetings to review the results in enough detail for the recommendations to be meaningful for the client while leaving room for discussion, questions, and answers. Additionally, time needs to be reserved to review the client's priorities and values, not to mention any outstanding paperwork that needs to be completed. And trying to present a full plan in detail while leaving room for peripheral discussion and requisite paperwork – all in 1 meeting – often ends in a very long meeting that can be hard for clients to engage in, and worse, makes the client dread coming back for more.
Part of the issue is that using a lecture-style presentation is often thought to be the most efficient way to deliver large amounts of information. However, clients (like students attending a boring classroom seminar) will generally tune out when they have trouble staying focused or keeping up with the information bombarding them. And while conveying information to clients might be an advisor's primary objective during a planning meeting, what's equally important is keeping clients engaged. Because engaging clients in the financial process is key to helping them comprehend and apply the information to their lives.
The difficulty of engaging clients with lecture-style presentations may explain the rise in collaborative plan presentation meetings revealed by the latest Kitces Research study on How Financial Planners Actually Do Financial Planning, which assessed how advisors prepare and present plans, breaking down their methods into 4 broad categories: calculator, comprehensive, custom, and collaborative. The results indicated that nearly half of the advisors in the study use planning software as a collaborative tool in client meetings (up from only about 1/3 of advisors who reported using collaborative planning methods in our earlier study conducted in 2018). Collaborative meetings support client engagement by demonstrating the advisor's desire to talk with their client, not just to talk at them.
Yet, using technology tools that facilitate collaborative financial planning meetings comes with its own challenges. In addition to the large amounts of information that advisors want to convey to clients, there is also a learning curve for clients to understand the features of the financial planning software itself, as clients need a base level of familiarity with at least some of the technology to engage in the meeting at all. And while collaborative tech tools may be useful to encourage engagement with tech-savvy clients, they may not improve participation for clients who may not be as comfortable with the same tech tools. For these clients, collaboration can become more difficult, and trying to implement tech tools to help them engage may simply cause them to shut down instead.
Learning curves, depth and breadth of information, and time requirements are all daunting challenges to overcome for both the financial advisor and the client to have a successful plan presentation meeting. And when plan presentation meetings don't go well, implementation of the plan by clients can also suffer. Yet, changes in educational pedagogy may shed light on a new way forward for advisors to go from plan presentation to plan engagement. Advisors want to engage clients and find better ways to manage their time spent in meetings; simply flipping when certain types of information are delivered can achieve both.
Using Flipped Classroom Principles Can Engage Clients In Planning Meetings
In traditional classroom settings, students come to class, the instructor delivers a lecture, students are tested, and the class moves on to new material. However, a 'flipped' classroom promotes a different way of teaching, flipping how tests and lectures are delivered. In a flipped classroom, students watch or listen to short, pre-recorded lectures before a live classroom session, take a test or quiz before the class, and then meet with the instructor in the classroom to review, correct, and dive deeper into the material that the students worked on prior to the classroom meeting. Flipped classroom principles employ 'problem-based' learning, where learning is based primarily on problem-solving. It relies on a different teaching style that can benefit students not only with better engagement but also with improved knowledge retention and, in some cases, motivation and self-efficacy.
Interestingly, flipped classroom methodologies are similar to the strategies that many financial advisors experienced while preparing for the CFP exam. Many CFP exam prep courses encourage students not to study what they already know but to focus more on topics they struggle with. This study tactic is related to flipped classrooms and problem-based learning and can be a very effective way for adult learners to master new material. There is no need to teach people what they already know; spending time on what students don't already know makes larger strides in content mastery, confidence, and self-efficacy.
Notably, instructors using flipped classroom strategies often have similar objectives as financial advisors. As while flipped-classroom instructors want their students to learn, engage, and feel confident with the subject matter being taught, so too do financial advisors want the same for their clients. And flipped classroom principles don't just benefit students and clients; they're also very satisfying for instructors and financial advisors who use them!
Kitces Research conducts quarterly interviews with advisors to examine trends in topics ranging from questions they ask their clients to meeting style and meeting content. Interviews conducted in the first quarter of 2023 focused on plan presentation meetings, and every advisor interviewed was excited by the opportunity to be a co-creator, decision partner, and valued part of a 50-50 relationship that brings contentment, ideas, peace of mind, and joy to clients.
As a professor myself, I have transitioned from traditional lecturing to flipped classroom teaching with my own students. And using the flipped classroom model really is that much better. As just one example, investment pricing models are very often a difficult subject area for students to master. Prior to using a flipped classroom approach, I would lecture on the Black-Scholes model, and students would listen. I would ask if there were any questions, and no one would ask. Yet, when I saw their test scores on the material, it was obvious that they did have questions that weren't asked. Flash forward to test score results after implementing flipped classroom methods. A short lecture and quiz provided to students in advance of our class showed me where students needed more support. When we did meet, I was able to focus our class time on those problem areas. And, at test time, scores were higher in comparison to test scores after teaching with the traditional lecture-based model!
How To Flip Plan Presentation Meetings Into Plan Engagement Meetings
Like classroom instructors, advisors can also 'flip' their plan presentation meetings by first sending information to clients in advance of the meeting, which can help to ensure that the advisor and the client will have a shared language and knowledge when it comes time to meet. When clients have the opportunity to familiarize themselves with rudimentary financial planning principles and basic technology issues in advance, they are more likely to ask meaningful questions because they will have a better sense of what to ask about, often as a follow-up question to something they learned or discovered from the materials they were sent in advance. Importantly, they will also be more likely to come to the meeting with planned questions that are relevant to their circumstances, as while it can be hard to come up with a question on the spot with new information (beyond simply asking questions to understand what a new concept means), having time to digest information can help to generate more reflective questions about how the new information applies to the client's life!
Giving clients a little information to chew on prior to the meeting, even if it is simply to explain a topic or walk through a brief explanation and visual of a planning tool such as Monte Carlo analysis, can help move away from a lecture-based meeting and more towards engagement and meaningful conversation.
Some advisors may wonder how this process will work – they send clients stuff all the time and clients never seem to look at it. How can they make this process work for them? Using video content may be the key. Some studies have suggested that consumers like, expect, and rely on short video content to learn about and research new products. Most clients are probably already accustomed to watching short video clips everywhere: on their phones, during their commute to work, while scrolling through their email, etc. And watching a short video is very different from and much more accessible than reading an in-depth email or written document. Video content is simply easy to consume – and perhaps even easier to retain.
Examples Of Personalized Video Content: Sterling Edge Financial
Advisors can easily include a short instructional video clip in an email that briefly suggests jotting down any notes or questions that come to mind after viewing the video(s). It's up to the advisor whether they want to invite an ongoing dialogue about the video content prior to an in-person meeting or to save the questions for the next scheduled meeting to review together.
Kit Lancaster, financial advisor and founder of Sterling Edge Financial, together with the firm's paraplanner Katie Sauer, have had great success using a 'flipped' instructional approach, providing short, personalized, pre-recorded videos to clients as pre-meeting material. The following 3 sample clips (2 of these feature me as the firm's pretend client!) were recorded to spark ideas for advisors to create their own video content for clients.
This first video is personalized for the client and begins with Kit explaining the rationale of the firm's process and why it's important to follow it. He then briefly walks through my proposed asset allocation, expected performance, and portfolio risk profile while displaying a screen share of my Riskalyze results, which he also explains will be discussed in more detail during our next in-person meeting. He closes by inviting me to communicate any questions or concerns, which he will add to the agenda for us to discuss during our next meeting:
In this video, Kit reviews the impact of the debt ceiling on financial planning for a recently retired client who had expressed fear and concern about moving forward with reallocating his investments. Along with reviewing the behavior and historical performance of the market (and providing some educational context that illustrates the relationship between fear and market timing), he also takes a moment to share his feelings of empathy for the concern and worry that the client has expressed:
In this video, Katie outlines some important points about my (hypothetical!) TRS pension plan benefits to better prepare me for an upcoming pension meeting, walking through the basic assumptions and details of my benefit plan, and encouraging me to reach out with any questions in advance:
Highlighting a single topic that is relevant to clients, personalizing the information, and encouraging clients to think of questions are good starting points for advisors who want to make their own video content – not only to increase engagement in the plan presentation meeting but also to devote more time to review the client's questions!
Creating Content For Flipped Planning Meetings
While Kit and Katie have had great success creating client engagement with their short pre-meeting videos personalized for clients, not all video content needs to be uniquely prepared for individual clients. Advisors can also prepare scripts that apply to clients in general, as there are probably things that they explain to every client in every plan presentation meeting (e.g., explaining the fundamentals of investment performance and asset allocation). And by recording it once, advisors can deliver the information in advance to clients to give them an opportunity to digest it at their own pace, encouraging them to come to the meeting with questions or concerns that can be discussed in more depth.
Even though transitioning to a flipped-classroom approach may take some work upfront (e.g., ironing out scripts to use and creating videos), many advisors will already have scripts they use during meetings, and videos can easily be made with simple technology resources such as Zoom and Loom. There's no need to get fancy with graphics or video capabilities – short, simple, real, and to the point is best.
A library of short videos can be built over time and can even supplement video content personalized for individual clients for more breadth. And as advisors expand their video content, they can develop valuable, reusable, and universally applicable content that can cover foundational planning principles designed to introduce a topic, give enough background, and provide the baseline vocabulary that advisors and clients need to share in order to communicate meaningfully about relevant points in the client's plan.
This can be especially impactful for newer clients who may be unfamiliar with common financial planning terms and acronyms. Short videos can help them get up to speed, leveling the playing field for them. By enhancing the client's ability to communicate, the advisor not only empowers the client with a shared understanding of the content but also adds value to the relationship. And when clients feel that they can engage using the language and ideas of their advisors, their self-efficacy increases and they become much more likely to proactively engage with their advisor.
Notably, for advisors considering implementing pre-meeting video content, it can be helpful for clients to know about the change in advance. Advisors can send an email to explain that videos will be a new service provided to help clients get more from the planning relationship and meeting conversations, including a short video to talk through some of the new features. And then, when next-meeting reminders are emailed to clients, a video that reviews key principles about a key agenda topic can be included, with an invitation to review the content and to come with questions (or to communicate any questions or concerns in advance). Emphasizing that the video content will help clients have more powerful conversations during their financial planning meetings can convince clients to take advantage of them as a valuable resource.
Suggested Topics For Creating Short Video Content
For some ideas on videos that advisors can create and send to clients in advance, consider the suggestions below. Videos should be no more than 5 minutes in length and should focus on content that will help the flow of in-person meetings.
Explaining the technology used in the planning process.
Monte Carlo Analyses
Walk clients through a screen share of Monte Carlo analyses software features, with a basic discussion of what Monte Carlo analyses examine and what scores mean. Explain the range of scores used as general thresholds or guardrails. Identify any key areas that clients should focus on and think about.
Tax-Loss Harvesting
Show clients how tax-loss harvesting opportunities are detected in an investment portfolio, with an explanation of the significance of capital gains and losses, the difference between realized and unrealized gains and losses, and the importance of the IRS's wash-sale rules. Show how the firm executes trades to implement tax-loss harvesting.
Cash Flow And Net Worth
Most of the advisors who participated in the Kitces Research study on Advisor Productivity reported starting plan presentation meetings with a discussion of cash flow or net worth, which can be a great way to introduce video content to help clients acclimate to the format. Screen share and walk through the financial planning software used to illustrate various components of cash flow analyses. Explain how assets and liabilities are used to determine net worth, the relationship between cash flow and net worth, and the importance of savings strategies to fuel retirement (and other financial) goals.
Explaining complex financial planning topics.
Divorce Calculations
Highlight some of the common issues that divorcing clients need to consider, such as implications of keeping their primary residence, when a Qualified Domestic Relations Order (QDRO) makes sense for clients with qualified pensions, spousal Social Security benefits for couples married longer than 10 years, alimony, and child support. The legal process and paperwork involved in getting divorced can be complicated and confusing for many clients, and clarifying the process can help them determine if they need to consult with a legal professional for assistance.
Tax Calculations
Whether explaining the value of a particular tax saving strategy like Roth conversions, providing general information on how tax brackets are structured, or walking through the steps of Form 1040 (and demonstrating how net tax liabilities or refunds are determined), advisors can help clients get on the same page by giving them a preview of concepts that will pertain to the tax discussion.
Employee Stock Options And Equity Compensation
Employee stock options and equity compensation plans can be confusing for many employees. Explaining how Employee Stock Options (ESOs) work, how stock option plans are analyzed in retirement planning analyses, and potential opportunities to leverage Net Unrealized Appreciation (NUA) can help clients understand the mechanics involved and better engage in the discussion.
Sharing Pre-Meeting Content To Streamline Live Meetings
After choosing the content and creating a video, the next step is deciding how to actually use the content. One way to share videos is to include them with the meeting agenda sent to clients well in advance of the meeting. In a flipped classroom setting, students receive short lectures explaining topics so that they can engage more deeply in class discussions instead of trying to keep up with new material they're hearing for the first time during a live class. Sending videos to clients ahead of time has the same intention.
Accordingly, when an advisor sends video content with the agenda in advance, they can also ask the client to review the video and invite them to engage with questions and comments (or simply ask the client to think about the content as they watch the video and to take mental notes that can be reviewed during the meeting).
Consider the following sample email, which is included with a meeting agenda and introduces video content that the client is asked to review.
Dear Bob,
I am so excited about our plan engagement meeting. The agenda is outlined below, and I have also included a few short videos that will explain some important considerations about the agenda topics we'll be covering, in particular, how cash flow and Monte Carlo analyses are used to develop your plan.
Please take a few moments to watch these prior to our meeting. Clients have reported that they enjoy watching these videos – not only do they help them understand their plan better, but they also help to generate meaningful, more personalized discussions about their financial goals and how the plan helps them achieve those goals.
I also encourage you to take notes on any questions or thoughts you have about the video content and to bring those to the meeting with you. Because it's most important to me that you understand your plan and that we talk about the content that you're most interested in!
- Check-In: Anything New?
- Plan Engagement
- Cash Flow
- Monte Carlo
- Vacation Plans
- Priorities: Where Do We Start?
I look forward to discussing the questions and ideas that come to mind for you as you watch the enclosed videos.
Cheers,
Meghaan
In the above email, the agenda is short and to the point. While the video clips included in the email were not personalized, the advisor could have easily added a personal recording. As noted in the agenda, Bob has a big vacation on the horizon. The advisor could have included a different video that described a few ways for Bob to take advantage of credit card deals on travel. It may be easiest for advisors to start creating video content addressing broad topics applicable to a wide range of clients. But spending some extra time creating personalized videos can still make sense if the clients love the videos, especially when 10 minutes spent making the videos saves 20 to 30 minutes in a meeting!
While some clients may find personalized video content more engaging, not all content needs to be personalized. The key point is for the video content to be short and digestible while helping clients become more familiar with the technology and key principles involved in their financial plans. As a professor, I use the flipped classroom approach and it has changed the way I work with students. And advisors who are also implementing a flipped instructional approach (such as Kit and Katie) have found that it works for them as well.
While clients may not be excited by the idea of doing 'homework' in advance of meetings, advisors can frame the task as a structured way to help clients engage more with their plans and build their financial self-efficacy muscles. For new clients who may never have had a financial planning relationship before, normalizing the flipped instructional approach from the start of the relationship can encourage engagement even more, as new clients who want the most out of the planning relationship will be more likely to complete their pre-assigned tasks and submit questions as part of the 'normal' way of preparing for and engaging in meetings.
Even though some long-time clients may be resistant to trying the new format, they should still be encouraged to engage with it. Advisors can let them know that the new format has led to better engagement and more powerful planning meetings, which will hopefully motivate them to give the new process a try.
While advisors may find it challenging to present financial plans in a single meeting, using flipped classroom strategies can help them make the process easier and can even result in happier, better informed, and more engaged clients excited about their own financial plans! Sending information in advance of meetings can facilitate deeper conversations that address questions and concerns that clients are most interested in.
Many advisors already have access to simple technology tools and relevant scripts that they find themselves repeating in nearly every plan presentation meeting, allowing them to create video content for their clients. And when clients take time to review the content in advance of meetings, they are likely to benefit from more meaningful conversations with their advisor and to appreciate the value of their financial plans more – ultimately resulting in better plan engagement!
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