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Is a Financial Advisor’s Role All About Financial Well-Being Now?

Since investments can be automated, should advisors move on to financial well-being?


The value investors place on financial advisors is evolving. Now more than ever, clients expect comprehensive advice that improves their financial well-being—which, by itself, is a complex, multifaceted concept.

Long gone are the days of hiding behind obfuscated fees and confusing jargon. Instead, advisors have to clearly prove their value—from delivering personalized solutions to supporting a financial wellness plan. And the doors are wide open for those who entered the field with a genuine ambition to help people make better financial decisions. So how can advisors adapt to this shift?

Understanding Evolving Client Expectations

When we asked investors what prompted them to hire their financial advisor, we didn’t get answers pertaining to investment performance. Instead, many people cited that they were uncomfortable making financial decisions on their own and wanted the guidance of a professional financial advisor. And the reasons for why investors chose to continue working with a financial advisor had a similar emotional bent, where many investors mentioned enjoying the peace of mind their financial advisor provided. Even investors who mentioned the quality of advice their advisor provided also noted that the advisor helped them forecast future planning needs. That suggests the advisor spent an adequate amount of time understanding the clients and their personal circumstances, allowing them to predict upcoming needs.

The Consumer Financial Protection Bureau defines financial well-being as “a state wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life.” Although this broad, vague definition may seem out of place in the numbers-world of financial planning, it actually speaks to the core of what many investors seek in a financial advisor. Many clients don’t care about owning private equity, a Roth IRA or dividend stocks but care about what that ownership affords them—whether that be reaching their financial wellness goals, achieving financial freedom, or fulfilling their life values. The modern-day financial advisor will help a person connect the dots between financial products and services and the makings of an enjoyable life.

How Financial Advisors Can Adapt to This Shift

In many ways, the job of a financial advisor has evolved into one of a financial coach, wealth coach, or even financial guru. In fact, if a client walks into an advisor’s office asking for specific help with setting up an annuity, the investor may actually be asking for the emotional support and guidance they need to lock their hard-earned savings away. Nowadays, advisors must recognize that many investor needs may remain unspoken and it’s up to the advisor to uncover those hidden gems.

Through in-depth discussions and effective communication, advisors can uncover a client’s needs—whether that need is annuity advice, a process to help them simplify the annuity decision so they can decide on their own, or someone to keep them accountable for pressing the ”buy” button.

Getting started

The good news is that many advisors are already leaning toward this human-side of advice, but they may be missing the tools to help them practice it in a scalable matter. Instead of hoping a client naturally decides to digs deeper during a discussion, advisors can lean on ready-made tools to help them get there:

  1. Start with recommended questions, but tailor your follow up based on their mindset. Asking a client questions like “What is important about money to you?” and “Why is money important to you?” can be a great way to start the conversation, but your follow ups should guide the client to a more productive mindset. For example, if your client is using words like “tomorrow” or “every day,” their mindset may be stuck in the present. Try prompting them to think more long term with techniques such as future visualization exercises.
  2. Don’t take goals at face value. Past research suggests that many investors rely on top-of-mind goals during discussions, 70% of which may not accurately reflect their true aspirations. That means that 70% of people may be working toward the wrong financial goals right now. We created a 3-step process to help people uncover their true financial goals. Additionally, advisors can take this process a step further by helping clients connect their financial goals to their life values using positive psychology.

  3. Communicate often and effectively. Research suggests that the level of trust in the advisor-client relationship is positively related to communication frequency. In other words, there’s power to being top-of-mind to clients. This communication can be an in-person meeting, a weekly newsletter regarding recent events, or even informational social media posts.

Meeting Client Needs

As the role of a financial advisor continues to evolve, it’s important to stay informed on client expectations. By offering personalized strategies that align with investors’ goals, you can build trust and strengthen your client relationships.

Deliver great advice with Morningstar Advisor Workstation. The all-in-one platform gives you the tools you need to show the value of your recommendations through customized reports and portfolios supported by trusted data.

Request a demo today.

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