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The number one reason why clients and prospects don't want a financial plan from their financial advisor
Working with financial advisors as a coach and practice management expert I always get asked the question what do I do when the client or prospect does not want a plan? Financial advisors are baffled about why someone would not want a financial plan. There are several reasons why people would not want a financial plan, The number one reason is they had a crappy experience with another financial advisor and felt like it was a sales tactic and sales process to sell their products and services.
Why else people don't want a financial plan?
Lack of Awareness: Some people might not be fully aware of the benefits of having a comprehensive financial plan. They might not understand how it can help them achieve their financial goals and provide them with a sense of security. They don’t know what they don’t know.
Overconfidence: Wealthy individuals might feel that their financial success means they have a good handle on their finances and investments. This overconfidence can lead them to believe they don't need a formal plan, even though a well-structured plan can help optimize their financial strategies.
Short-Term Focus: Many individuals tend to focus on immediate gratification rather than long-term goals. Creating and following a financial plan often involves making sacrifices in the short term for greater financial security and stability in the future, which some people might not be willing to do.
Complexity: Financial planning can sometimes be overwhelming, especially for those who are not well-versed in financial matters. The complexity of financial jargon, investment options, and tax implications can discourage people from creating a plan.
Procrastination: Some people may intend to create a financial plan but keep putting it off for various reasons. Procrastination can be a significant barrier to taking the necessary steps to secure one's financial future.
Existing Advisors: High-net-worth individuals often have financial advisors, accountants, and other professionals managing their wealth. They might assume that these experts are effectively handling their financial matters and, therefore, don't see the need for a separate formal financial plan.
Complex Financial Situations: Some wealthy individuals have complex financial situations involving multiple income streams, investments, and business ventures. They might believe that a standardized financial plan template wouldn't adequately address their unique circumstances.
Perceived Time Investment: Creating a comprehensive financial plan can be time-consuming, and some wealthy individuals might feel that their time is better spent on their business endeavors or personal pursuits.
Negative Associations: Some people might associate financial planning with stress, complexity, or the notion that it's only for wealthy individuals. These negative associations can discourage them from engaging in the process.
All the reasons listed are behavior management issues for financial advisors. A sales process does not solve behavior management, you may need to change your process.
Do you have a proven scripted process?
Investors who have had a bad experience Do not know the value of a financial plan. How do you change your process so that it is all about planning and advice and not a sales process?
Let me ask you a few questions. Do you get clarity around all of the client's goals mapped out on paper, all four five, or six-plus goals? Do you have a process to help them gather data and get them organized in all seven areas of their financial life? Do you have a process to show the value and type of work you do by sharing sample comprehensive financial plans that cover all seven areas? Does your sample plan have pictures of their goals? Does your sample plan have an implementation schedule action or To Do List that maps out the next 12 months 36 months and a list of advice to help them reach their goals? What is your process to engage people and develop not only a financial plan but a comprehensive financial plan that covers all seven areas? This includes tax estate investment risk insurance debt and cash flow. Do you have a process like this or are you winging it?
Does your software help you or hinder your process?
Your best clients challenge you to come up with solutions for problems and opportunities they have. This is where you do your best work. But it's not just about your software and putting together a plan to acquire a client. You have demonstrated to your best clients a list of advice to help them achieve their goals, you're no stone-unturned checklist of 50 to 100 items to review annually and a PowerPoint illustration that is emotionally engaging with all of their goals probability of success of reaching all of their goals in an implementation schedule to help them get there. Financial advisors and firms relying on one piece of software Is not helping financial advisors and their ideal clients and prospects. Financial advisors need to share samples of their work, details of their process, and the software they used to help them in their work. This may include:
Client data gathering and organization software including document management
Comprehensive Financial planning software, Covering all 7 areas
Cash flow and retirement distribution software
Tax planning software
Estate planning software
Portfolio analysis and management software
What are you going to do differently to help ideal clients and prospects put together a comprehensive goals-based plan for their future?
How about your goals for your practice in 2023?
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