Nerd's Eye View blog

The Latest In Financial #AdvisorTech (February 2021)

February 1, 2021 07:05 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the February 2021 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the big news that Walmart has partnered with Ribbit Capital (one of the FinTech VC firms that backed Robinhood) to begin creating its own FinTech solutions for Walmart customers and employees… which would instantly create one of the largest distribution platforms for a FinTech solution (as Walmart reaches nearly 40% of all Americans on a weekly basis!) and also a Financial Wellness platform (as the world’s largest private employer). Yet the reality is that, as the world’s largest superstore, Walmart is arguably well positioned to become a financial products superstore as well – taking a page from the playbook of Sears, the 20th-century retailer that expanded into financial services and, in the process, spawned Allstate Insurance and the Discover card – though that still doesn’t mean that Walmart will necessarily want to enter the far-more-challenging-to-scale services business of financial advice itself.

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

- Former Vanguard CEO McNabb joins the Altruist advisory board, signaling that it’s not just RIAs themselves but also asset managers that would like to see a breakup of the current RIA custodial oligopoly

- Milemarker launches a new “Integration-as-a-Service” as AdvisorTech integration fatigue hits new depths even as cross-platform integration becomes more essential than ever

- DPL raises $26M of private equity capital to scale its new fee-based annuity platform for RIAs

- MaxMyInterest tries to expand the reach of its cash management solution for advisors not by integrating with their investment platform but via Redtail’s CRM instead

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

- Focus Financial launches its own cash management solution in partnership with Orion and competing with the RIA custodians its partner firms use

- National Guardian Life acquires Everplans as more insurers look to acquisitions as the means to facilitate their own digital transformations and overcome their Innovator’s Dilemma

- Chalice Network launches a new “Certified FinTech Advisor” designation for financial services enterprise executives trying to get up to speed in the world of Advisor FinTech

- Financial personality assessment tools are on the rise as client profiling goes beyond “just” risk tolerance to a wider range of client financial behaviors that advisors may be able to help (or, alternatively, want to screen for!)

And be certain to read to the end, where we have provided an update to our popular “Financial AdvisorTech Solutions Map” as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

Weekend Reading for Financial Planners (Jan 30-31)

January 29, 2021 02:59 pm 4 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a helpful explainer of what, exactly, is going on with GameStop and a few other high-flying stocks that have captured industry headlines and media headlines this week with a combination of "short squeeze" and "gamma squeeze" that, driven by a stampede of Reddit users, may ultimately become known as the first "crowd squeeze" (though in the end, it doesn't appear to signal any kind of breakdown in markets themselves, but is simply a modern example of a type of investor squeeze that has been known and observed in markets for decades).

Also in the news this week are a number of other notable industry headlines, including:

Service complaints are up at both Schwab and TD Ameritrade, not as a result of the merger integration itself (which has yet to even substantively begin), but a combination of post-merger talent drain from TD Ameritrade and coronavirus remote-work challenges for Schwab, amidst what is still an ongoing bull market in the creation and growth of the RIA channel
Fiduciary advocates call for SEC Commissioner nominee Gary Gensler to consider renaming Regulation "Best Interest" to "New Suitability" instead

From there, we have several articles around marketing communications:

Why closing prospective clients is all about identifying the triggering events that also cause them to take action (and not just providing them information about the advisor's services and trying to convince them of the value)
How one-sentence emails can be effective for moving a prospect to action (or at least clarifying what it will take to do so)
Why it may help to think about marketing strategies in terms of the "minimum effective dose" it takes to actually make an impact

We've also included a number of practice management articles with a focus on hiring in particular:

Why it's not a good idea to rely on resumes and instead focus on asking for real work samples
The problems with relying on job interviews and why at the least interviews should be based on a series of standardized and structured questions
How the best hiring practices don't rely on using creative or unique interview questions and instead are simply based on leveraging a repeatable process that makes it easiest to really compare job candidates on their actual job skills and whether they possess the required job traits to be successful in the role

We wrap up with three final articles, all around the theme of work-from-home versus office environments, as the COVID-19 vaccine continues to roll out:

Why coffeehouses are known for being a good creative space despite (and in fact, because of) their distractions and external stimuli
How the future of office space is likely to be a blend of "core" in-person office hours for team meetings and collaboration, and work-from-home space for focus work
The rise of video-game-based work environments where co-workers interact with avatars in a game environment to better promote interpersonal interaction!

Enjoy the 'light' reading!

Kitces & Carl Ep 52: Are Advisor Websites Being Asked To Do Too Much To Grow The Business?

January 28, 2021 07:02 am 3 Comments CATEGORY: Kitces & Carl Podcast

Over the past several years, the technological capability for financial advisors to implement dynamic, interactive websites has evolved dramatically. Gone are the days of needing to publish static brochure-style webpages with images of lighthouses, compasses, and winding roads, and instead, advisors are able to publish robust portals that allow them to share content that demonstrates their expertise, provide information about the advisor(s) and their team, communicate directly with those they hope to serve, share the details of their pricing and the value they provide, and (if everything goes to plan) have visitors become a lead or even outright book an appointment. Yet the end result is that the advisor’s website becomes a sort of Swiss Army knife… chock full of little tools that can do a lot but don’t necessarily work nearly as well as a tool with a singular purpose. Which, in turn, raises the question: Are advisors asking their websites to do too much?

In this our 52^nd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the one important thing that all advisor websites should do, ways to create awareness and become relevant to a specific audience over time, and why some advisors have unrealistic expectations from their website.

At its core, the key to marketing success as a financial advisor is learning how to solve the specific problems of a specific group of people better than anyone else (rather than trying to be ‘everything to everyone’, and in the process, not actually being especially relevant to anyone). Because having a clear focus on a clear target market niche clientele allows the advisor to differentiate themselves in a crowded and competitive marketplace, by being able to clearly stand out to the clients they are best able to serve. Which also means moving away from having a website that tries to be everything to every visitor, and instead simply gives a clear statement about who they serve… and an obvious next step for those prospects to actually move forward with the advisor.

Which, in almost every instance, isn’t going to be a newly minted client deciding to hand over their life savings. Because, outside of referrals who are doing their last bit of due diligence before reaching out, most visitors to a website simply aren’t ready to do business with an advisor upon their first visit.

Instead, by simplifying a website’s design and ‘just’ having a well-defined audience and clear next step, advisors can build a targeted mailing list that they can use to share out relevant and actionable content, so that when someone who’s been on that list realizes they have a problem that needs solving, they will remember that the advisor who serves ‘people just like them’. In other words, an advisor's website should have one purpose, and that’s to gain permission to communicate with a visitor again. And use those subsequent communications to build the trust relationship necessary to actually do business with them whenever they are ready.

Ultimately, the key takeaway is that advisors should shift their mindset around what their websites are meant to do, and recognize that it’s extremely rare that a first-time visitor has arrived ready to do business. And that, unless it’s clear who the advisor serves and what the next step is, the odds are that all those first-time visitors will also be last-time visitors as well (even if they are exactly who the advisor serves in the first place) unless there’s a simple way (and a reason) for them to give their permission (by sharing their email address) to hear from the advisor again. While advisors who can find a way to stay in front of people in the future after they come across the advisor’s website once have at least a fighting chance of being top of mind when that one-time visitor eventually needs to actually hire a financial advisor!

Dave Ramsey’s Behavioral Advice Ingenuity To Help People Make Better Financial Decisions

January 27, 2021 09:43 am 22 Comments CATEGORY: Financial Psychology

Dave Ramsey has hosted the popular “Dave Ramsey Show” radio program since 1992 and founded Financial Peace University in 1994. Since then, he has helped millions of people with personal money management issues and has authored several best-selling books. Despite his popularity, though, many financial advisors have criticized the investment and debt management advice Ramsey frequently gives his listeners and readers. And while some of the advice that Dave Ramsey has given (e.g., assuming a 12% stock return, endorsing the debt snowball method of reducing overall debt, and encouraging 8% retirement distributions) may not result in optimal outcomes from a strictly technical perspective, the reality is that Ramsey’s advice has effectively helped millions of individuals and families reduce their debt, manage their money responsibly, and get on track to establish good financial habits.

For instance, while most advisors would agree that Dave Ramsey’s 12% return assumption for stock market investors is an alarmingly high return assumption, the reality is that using a high return assumption helps clarify the power of compound interest and the magnitude of potential wealth that can accumulate when new investors start saving early. In other words, the more compounding you see yourself missing out on, the more “FOMO” (Fear Of Missing Out) motivation it can inspire… which in practice, has been an effective motivator for many of Ramsey’s followers to start developing good savings habits!

Similarly, Ramsey’s advice to use the ‘debt snowball’ method – which advocates paying down one’s smallest debts first (in contrast to debts with the highest interest rates) as a means to tackle personal debt – is also under frequent attack. Yet while there’s no question that mathematically, paying off loans with the highest interest rates first is the most financially efficient method of debt reduction, borrowers who feel overwhelmed by debt are often more motivated to stick to a debt paydown plan when they experience the small psychological victories of eradicating their debt one at a time. Which means the most psychologically motivating approach really is to tackle the smallest debt first – actually pay it down successfully – changing one’s self-image to someone who can successfully tackle the rest of their (higher-interest) debt, too.

And many financial advisors, especially those who observe Bill Bengen’s 4% Safe Withdrawal Rate rule as the established norm, have also criticized Dave Ramsey’s 8% retirement distributions as dangerously high. However, while an 8% withdrawal rate is high, it is not necessarily as catastrophic as most advisors would suggest, given both the reality that many retirees can and do adjust their spending later if it becomes necessary… and that in practice, most retirees reduce their spending in the later years, anyway. Furthermore, higher withdrawal rates can be rational when we account for a retiree being willing to take some risk of running out of money, particularly when they have some guaranteed income, like Social Security, to provide a spending floor. And in practice, particularly for the audience that Ramsey is trying to reach, which may include individuals who got into debt trouble or started saving at a later point in life, a 4% withdrawal rate necessitates so much in retirement savings that it may simply feel unachievable for many – which, again, could de-motivate them from retiring (or saving) at all – while an 8% withdrawal rate target may feel like the goal is more achievable… which, again, helps them to actually follow through and take positive steps that improve their financial situation!

Ultimately, the key point is that even though Dave Ramsey may draw a lot of criticism from financial advisors who analyze his recommendations from a mathematical and technical perspective, he is very effective in helping a large number of people to change their financial behavior for the better, particularly those who need to get started on a substantively different path than the problematic one they are currently on (and may feel stuck on). His ability to help people modify their behavior may not rely on optimal advice from a technical standpoint but, notably, being ‘right’ isn’t necessarily always the most important factor for motivating and encouraging people to take the first major step of change in the first place. And so from a behavioral change perspective, there is quite a bit of ingenuity within Dave Ramsey’s advice (and the systems he has created to deliver that advice) that advisors may want to reflect on when helping their own clients change their behavior for the better!

#FASuccess Ep 213: A Policy-Based Financial Planning Approach To Advising Clients Through Uncertainty, With Dave Yeske

January 26, 2021 07:05 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 213th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Dave Yeske. Dave is the co-founder of Yeske Buie, an independent RIA based in San Francisco that oversees 740 million of assets under management for more than 300 affluent clients. What's unique about Dave, though, is the way he has blended together academic financial planning research with the practice of financial planning, culminating in a policy-based financial planning approach that frames financial planning, not in terms of the recommendations he makes for specific client situations, but the policies he set with clients to help them confidently handle any number of future scenarios that might arise.

In this episode, we talk in-depth about how Dave applies his policy-based financial planning approach at Yeske Buie, the monthly reports they generate for retired clients to help them see whether they're in their safe spending policy guidelines, the quarterly tax reports they create to coordinate with their clients' outside accountants. The Money Quotient questionnaires they use on an annual basis to be certain that they're covering all the bases with their clients, and how using a policy-based approach to financial planning can help reduce client stress during turbulent markets.

We also talked about how Yeske Buie structures its own approach to financial planning with clients, why the firm has chosen to take a team-based approach for all clients it serves, the reason Yeske Buie chooses to charge a single consolidated assets under management fee despite the fact that in Dave's own words, 75% of what they do for clients is around the financial planning and not the investment management.

And why after hearing of the impending death of the AUM model for nearly his entire 30-year career, Dave now thinks it's more important to be nimble and adapt to changes in financial planning services and business models over time, rather than just trying to predict what the future may hold. And be certain to listen to the end, where Dave shares why he has such a passion for academic research despite being a self-admitted late bloomer in his own journey through college.

The reason that Dave got so involved in the Financial Planning Association and how volunteering back to the profession has advanced his own career, and how even financial planners who teach their clients about long-term compounding seem to under-appreciate the way that compounding works in our own advisory businesses, as Dave reflects on how painfully slow and difficult was for the first six years of his business, but how dramatically the growth began to accelerate in the years that followed and has continued ever since.

So whether you’re interested in learning more about why Dave pursued getting his doctorate while running his own firm, how he may have created the first-ever online client portal, or why he is trying to become 'dispensable' in his firm, then we hope you enjoy this episode of the Financial Advisor Success podcast.

2 Ways I Improved My Advisor Website SEO (And How You Can, Too)

January 25, 2021 07:03 am 7 Comments CATEGORY: Marketing

The financial advisor website has become the equivalent of a financial advisor’s digital storefront, a staple of attracting clients and growing the business. By investing resources into designing attractive website pages and writing relevant articles to include on their website, advisors aim to give clients a sense of the firm’s scope of services and breadth of knowledge. However, a digital storefront isn’t effective if no one ever walks by to see it in the first place… which in the internet era, means implementing a strategy to optimize how the advisor’s website can be found by search engines and the prospective clients who may be searching there for a financial advisor!

In this guest post, Taylor Schulte – founder of Define Financial, an independent RIA based in San Diego, CA – discusses two primary strategies that he has implemented to optimize the content on his own firm’s website to maximize its Search Engine Optimization (SEO). These tactics have helped improve his online visibility, grown organic search traffic by over 1,500% in three years, and, most notably for the business, generated an average of 15 high-net-worth leads per quarter, through his website, for his advisory business.

The first SEO strategy is to upgrade an advisory firm’s descriptive meta tags on its website, which serve to provide search engines with important information about how web pages should be displayed in search results (in the hopes of persuading more prospective clients to click through). Accordingly, it is important to conduct keyword research and select relevant keywords that identify unique features about the firm (e.g., who the advisors are, what they do, who their ideal clients are, and where they are located) that help increase the probability of the website being ranked highly as a search result for someone explicitly looking for what the firm has to offer. Fortunately, there are many SEO analytics tools and plugins (e.g., Ahrefs, Yoast, Google Analytics, and Ubersuggest) designed to help advisors easily conduct keyword research for their websites (as well as help advisors conduct regular website audits to maintain and improve SEO results, which should be an ongoing process).

The second advisor SEO strategy is to improve the internal and external links tying to the financial advisor’s website, effectively improving the quality and value of a website’s content (and its perceived credibility in the eyes of search engines). The two types of links to improve for SEO purposes are: 1) internal links that send a visitor to a new page on the same website (e.g., a link on a site’s home page that sends a visitor to the “Meet the Team” page), which help visitors easily find site features and relevant content; and 2) external links that send visitors to a new page outside the website (e.g., a link in a blog post on one website that sends a visitor to an unrelated vendor website that sells a product mentioned in the blog), which offer visitors a useful (and time-saving) resource to delve deeper into topics of interest (and make the advisor’s website seen as a valuable source of information). Fortunately, SEO plugin tools again typically have features to help advisors assess opportunities to add both internal and external links (and also to minimize the potential number of broken or orphan links on the website).

Another way for advisors to improve website SEO is to take steps to increase backlinks, which are links on other websites that point back to the advisor’s website. Three ways to increase backlinks include: 1) optimizing the firm’s or advisor’s profile pages on industry network or organization websites (e.g., industry-wide organizations that offer “Find An Advisor” services); 2) offering to write guest posts for websites or blogs that are read by the advisor’s target demographic; and 3) responding to media queries (and including your website link with the submissions) through organizations such as XY Planning Network, the Financial Planning Association, or Help A Reporter Out (HARO), where the reporter hopefully links back to the advisor’s website as part of the source attribution for the quote.

Ultimately, the key point is that there are simple steps that financial advisors can take to improve their website’s SEO. By conducting some basic research to select effective keywords for meta tags, optimizing and auditing their internal and external links on a regular basis, and connecting with other organizations and websites to increase backlinks, advisors can improve their website’s SEO results, making it easier for their ideal visitors to find their website, and potentially even to become new clients!

Weekend Reading for Financial Planners (Jan 23-24)

January 22, 2021 02:52 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that former CFTC Chairman Gary Gensler has been nominated as the next SEC Commissioner, though as a regulator who's known for being hard on Wall Street is still not anticipated to overturn Regulation Best Interest (but may take further steps to enforce it more aggressively and ensure that the "Best Interest" obligation of broker-dealers really is one).

Also in the news this week are a number of other notable industry studies, including:

2020 shaped up to be a record-breaking year for advisory firm mergers and acquisitions, as a Q2 slowdown from the pandemic rebounded in the second half of the year on advisory firm valuations that continue to rise
A new Envestnet-MoneyGuide study finds that standalone financial planning fees are up 50% to $2,500/plan since 2015, with 72% of advisors now reportedly charging financial planning fees separately on top of/alongside their AUM fees

From there, we have several articles around investment trends:

One study finds that 37% of financial advisors now at least 'consider' ESG factors for all of their client portfolios
Mutual fund assets experienced record-shattering outflows in 2020 (despite years of market volatility theoretically being a moment for actively managed mutual funds to shine)
DPL Financial Partners raises $26M of new capital to fund their no-commission annuity marketplace for RIAs

We've also included a number of practice management articles:

Why it's important to look back on a firm's referral sources and what worked (or didn't) when it came to referrals in 2020
Why segmenting clients isn't just about giving 'more' to "A" clients but specifically offering a "RAVE" experience (with a focus on it being Rare, supporting Advocacy, delivering Value, and being an Experience unto itself)
How the shift to working with clients virtually means having a 'local' advisor is no longer necessary... a game-changer in marketing as a financial advisor for many years to come!

We wrap up with three final articles, all around financial advisor diversity:

While diversity is a common topic at financial advisor conferences, the lineup of conferences themselves has been remarkably lacking from a diversity perspective (especially with respect to racial diversity)
How some advisory firms are trying to shift their own company culture to support diversity and are recognizing the limits of an 'eat-what-you-kill' approach to new advisor recruiting
The latest data on the diversity of CFP certificants themselves, which shows that advisors of color are on the rise (up 12.6% over 2019, which itself was up 12.3% over 2018), though the total number of Black and Latino CFP professionals is still only 1.7% and 2.5%, respectively!

Enjoy the 'light' reading!

Why The New 100%-Of-AGI Charitable Deduction Limit Isn’t Actually Good Tax Planning

January 20, 2021 07:06 am 6 Comments CATEGORY: Taxes

For many financial advisors, helping affluent clients with charitable planning strategies is a common objective, particularly those who have more than enough to satisfy their own retirement and family goals and also wish to make substantial charitable contributions that will help others in need. Which in recent years has become even more flexible, as the Tax Cuts and Jobs Act increased the percentage-of-AGI limit on cash contributions from 50% to 60%, and the CARES Act (as extended by the Coronavirus Stimulus Act) further increased the limit from 60% to 100%(!) of AGI, making it possible for the most charitable inclined clients to fully offset their income and reduce their tax bill to zero! Yet as it turns out, reducing one’s tax bill all the way to nothing actually produces tax savings at the lowest tax brackets… such that in the end, the new 100%-of-AGI charitable giving limit actually is not such a great deal after all!

Taxpayers who itemize deductions on their Federal income tax return can generally deduct contributions made to qualifying charitable organizations up to some percentage of their Adjusted Gross Income (AGI), traditionally ranging from 20% to 50% of AGI, and is dictated by such factors as the nature of the asset donated (e.g., cash gifts vs Capital Gain property) and the type of charitable organization receiving the gift (e.g., “50% Limit Organizations”, which include churches, educational institutions, hospitals, government entities, and public charities; and “Other Charitable Organizations” which include any charity not considered a 50% Limit Organization).

As a result, charitable contributions can be categorized into four primary groups: 1) cash contributions to 50% Limit Organizations, 2) cash contributions to Other Charitable Organizations, 3) Capital Gain property contributions to 50% Limit Organizations, and 4) Capital Gain property contributions to Other Charitable Organizations. And when contributions in a given year overlap between multiple categories, there is a specific order of operations to be employed, which first prioritizes cash over Capital Gain property contributions, and then 50% Limit Organizations over Other Charitable Organizations.

With the CARES Act of 2020, though, a new 100%-of-AGI limit on deductions for category 1 – certain “qualified” cash contributions to charities – was implemented (and extended through 2021 with the passage of the Consolidated Appropriations Act) to provide some additional incentives for charitable giving in the face of the financial impact that COVID-19 has had on Americans. Which means that taxpayers can technically offset all of their taxable income with charitable contribution deductions, resulting in a tax bill of $0!

Still, though, the fact that one can take charitable contribution deductions up to 100% of their income doesn’t necessarily mean it’s a good deal to actually do so. Because it is often simply be better for a taxpayer who normally finds themselves in a higher ordinary income tax bracket to go ahead and actually pay taxes on a portion of their gross income at lower tax rates (and not offset it with a charitable deduction), thereby preserving their charitable giving (or at least their charitable deduction) for future years when their rates may be higher again. And by spreading charitable contributions out over multiple tax years (and leveraging the five-year carryforward allowances for unused charitable contribution deductions), they can effectively offset income in years when they would be subject to higher tax rates, thereby producing a greater total tax benefit.

Ultimately, the key point is that while the new CARES Act (now extended by the Coronavirus Stimulus legislation) makes it possible to claim Qualified Contribution deductions (with 100%-of-AGI limits) and zero out one’s tax bill, in practice it is rarely a good idea to do so. As while there is a small group of ultra-high-income individuals who can occasionally still benefit from using the increased deduction limits they provide, in most cases, high income donors are better served to stretch out or carry over a portion of their charitable giving (and charitable deductions) across multiple high income years instead. Though for financial advisors who have clients who won’t necessarily benefit from the provision, simply being able to explain why the better option would be not to take potential deductions as soon as possible can be a valuable service, in and of itself!

#FASuccess Ep 212: The Professional Paraplanner As (Virtual) Support And A Career Path Unto Itself, With Alex Hopkin

January 19, 2021 07:05 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 212th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Alex Hopkin. Alex is the founder of Simply Paraplanner, a job board and training portal for virtual paraplanners across the U.S. What's unique about Alex, though, is her vision for Simply Paraplanner – not just as a way for paraplanners to find job opportunities and firms to find virtual paraplanning help – but to support the ongoing evolution of paraplanning from an entry-level support role into a dedicated professional services career path unto itself.

In this episode, we talk in-depth about what paraplanners really do in an advisory firm to make it more efficient and effective, the best way to divide tasks between a paraplanner and a lead advisor, how the internal process of crafting a financial plan must change when a paraplanner develops the initial plan but the lead advisor has to get up to speed on the details and recommendations in order to actually deliver it, and how the technical demands of the paraplanner role have risen in recent years to the point that designations like the Financial Paraplanner Qualified Professional are no longer necessarily sufficient, and firms increasingly want someone with CFP certification or at least who has completed the CFP educational requirement and passed the CFP exam to be in the paraplanner role.

We also talk about the Simply Paraplanner platform itself, how advisory firms become split about hiring part-time or full-time paraplanners based on their own current size and needs, the support services that Simply Paraplanner provides for firms that aren't sure how to pick the right paraplanner for their own firm, and the portal that Simply Paraplanner has developed to help newer virtual paraplanners get the training they need to be successful, from guidance on how to set up a virtual paraplanning practice to training in key financial planning software like eMoney and MoneyGuidePro.

And be certain to listen to the end, where Alex shares her own path through the financial services profession and building the Simply Paraplanner platform, from the frustrations of trying to get paraplanner work herself as a stay-at-home spouse and military mom that led her to founding Simply Paraplanner so others could have an easier journey, the emotional roller coaster that is founding and building a business, the turning point where Alex decided three years ago to turn Simply Paraplanner from a hobby into a full-time focus by taking on a partner so that they can build together, and Alex's advice to newer financial planners trying to enter the profession today who want to get started on the right foot.

So whether you’re interested in learning about the education and designations needed to become a professional paraplanner, how hiring a paraplanner can benefit your firm, or the challenges that Alex faced trying to find work virtually as a military spouse, then we hope you enjoy this episode of the Financial Advisor Success podcast.

Making Financial Planning More Tangible Using (Turnkey) Deliverables For Clients

January 18, 2021 07:04 am 0 Comments CATEGORY: Practice Management

When assessing the suitability of a service provider, from a plumber to an attorney to a financial advisor, prospective clients consider several aspects of the service they anticipate receiving: reliability (will they do what they promised to do?), assurance (can I trust them?), empathy (will I receive individual care and attention?), responsiveness (will they be prompt, or accurately communicate timelines?), and tangibles (the physical experience of the service, from the offices and attire of the professional to the deliverables they provide?). Of these areas, tangible components are often overlooked by most advisory firms – given the otherwise intangible nature of financial planning as a service – yet actually present an interesting opportunity for financial advisors to improve their clients’ experience with the firm and the financial planning process.

Some examples of tangibles that can influence a prospective (or existing) client’s perception about the service they will receive from their financial advisor include the condition and décor of the office space, appearance and attire of employees, and the materials associated with the financial planning service itself (e.g., marketing materials, client statements, the physical financial plan, deliverables at the client review meeting, etc.).

In practice, advisory firms often struggle to create tangible deliverables for clients on an ongoing basis because of their time-consuming nature. But systematizing a firm’s financial planning processes also makes it easier to systematize the deliverables along with them. For example, a meeting surge system can be implemented to help advisors streamline their processes, which can give the team the time they need to prepare appealing, tangible deliverables that are systematically produced for all clients and prospects at specific times throughout the year. Alternatively, a client service calendar can be developed to organize and showcase upcoming deliverables that clients can expect to receive on a monthly basis.

Turnkey resources are also widely available to financial advisors, and can be used to help an advisory firm systematize processes that include tangible elements for existing and prospective clients, from stand-alone planning modules (e.g., Right Capital’s menu of planning report options), to modules that provide more of a comprehensive interactive experience for clients (e.g., MoneyGuidePro’s ‘My Blocks’ modules), and planning tools that provide specific analyses (e.g., Holistiplan’s tax analysis report, Riskalyze’s risk assessment tools, Hidden Levers’ portfolio stress test report, and i65 Medicare planning tools). Further, customizable template tools, such as fpPathfinder’s financial planning checklists, flowcharts, and market commentary messaging services from firms like Clearnomics, Broadridge Forefield Adviser, and Marketing Pro, can be used to send clients informative, tangible deliverables that remind them of the value their advisor provides to them. Advisors can even create investment performance reports and beneficiary summary reports on a regular basis as another simple way to provide their clients with tangible, impactful deliverables that remind them that their advisor keeps them top of mind.

In designing a more tangible client experience, advisors can consider introducing tangible elements throughout the five key stages identified as a client’s most memorable milestones in their relationship with an advisor: 1) Introduction – when first impressions are made and scheduling meetings take place, 2) Interaction – the first opportunity for clients to assess the meeting environment and data collection process, 3) Guidance – where advisors use technology tools to create analyses and recommendations to share through reports, illustrations, and other deliverables, 4) Implementation – the process created by the advisor to make plan implementation easier for clients, and 5) Relationship – the ongoing services and engagement opportunities created by the advisor that can deepen the rapport with clients.

Ultimately, the key point is that there are many resources for advisors to elevate the client experience by incorporating tangible deliverables into the menu of services they provide. And by considering the most memorable stages of the client journey, advisors can strategically implement impactful deliverables that remind clients how valuable they really are!