A More Meaningful Value-Conversation For Financial Advisers

Liz and I have been with the same financial adviser for almost two decades.

I am an ‘unofficial’ financial advice advocate… often blogging and speaking at conferences about the connection that wise choices on how you spend and invest your money can impact your potential to live a happy, flourishing and prosperous life.

Liz and I share a wonderful lifestyle, thanks to the advice, coaching and mentoring we’ve received from our financial adviser.

Why I’m worried about the Financial Advice Industry, and why you should be too!

The model above shows what is the restrictive paradigm that is currently present in the financial planning industry… and it’s blocking the potential for significant growth and value creation for financial planners and their potential clients.

Beyond the value of your ‘value-proposition’

While there has been and continues to be much discussion, commitment of resources, training and investment in trying to articulate the value (and price) of financial advice, (represented by the smaller circle), what is being unintentionally under-valued by financial advisers is the non-financial advice (represented by the larger circle) that forms the majority of the ‘value-connection’ in the client’s mind.

Sadly, based on my experiences in coaching and training financial advisers for over two decades now, I fear that many financial advisers still under-value the part of their natural advice process that their potential and existing clients value most… and that creates a disengagement of value.

This is not just ‘mind-set’, although the way Advisers think intrinsically about where and how they really create value for their clients, does significantly impact their capacity and confidence to better articulate their value.

Breaking free of the value-of-financial-advice paradigm

For as long as the Financial Planning Industry continues to operate in the restrictive paradigm that their value is in their financial advice, the potential of the industry to grow and create more meaningful value through extending their brand alignment beyond pre and post retirees, will continue to be restricted.

I want to be clear here that I’m not just talking about the old chestnut of ‘lifestyle planning’ as it has been traditionally accepted.

The notion and importance of ‘lifestyle planning’ has been around for decades, and there have been some financial planners who have embraced, implemented and created value for themselves and for their clients. However, while a great place to start (because I believe most advisers understand the concept of lifestyle planning, I’m not convinced they value it anywhere near enough), this is only part of the potential for more meaningful value-conversations above and beyond the value of financial advice.

What science tells us about living a ‘good life’

Research from the field of applied positive psychology including that from Prof Sonja Lyubomirsky (University of California) validates that while 50% of our overall sense of happiness and wellbeing is genetic and surprisingly that for the majority of us, only 10% is influenced over the long-run by our personal situation and environment, the remaining 40% of our overall sense of wellbeing is based on the intentional choices and actions we take.

While I’m certainly not under-valuing the value of professional financial advice, the opportunities for Advisers to step into helping clients in these more non-financial related advice areas, more meaningful value-discussions around what really leads to living more happy, flourishing and prosperous personal and work lives, will reap significant reward for those Advisers who embrace the opportunity, and will make significant and positive differences into the overall sense of happiness and wellbeing for their clients.

Broadening the value to Gen Y and Gen X

It also opens up the opportunity for more meaningful discussions and non-financial advice (at least not traditionally directly related financial advice) with the often non-aligned Gen Y and Gen X, who potentially don’t fit the typical ‘preferred client model’ of many Advice Practices, because they do not typically have substantial savings or investments to manage, and who, because of a branding and value mis-alignment, don’t see themselves as potential clients of financial advisers.

However, for Advisers who broaden their value-conversation beyond financial advice, integrating lifestyle advice, work-life advice, and in essence broadening into the field of personal coaching and mentoring (as our financial adviser has done for us), the ability to attract and retain profitable Gen Y and Gen X clients is where potential and significant growth is possible, and will create longer relationships with clients, which means more revenue over a sustained period of time, and more value being delivered for clients for a longer period of time… and not just value from financial advice.

Put this on the agenda at your next conference or professional development program

Give me a call to help shift the mindset, skill and confidence of your advisers to expand their potential beyond the value-of-financial-advice paradigm. Call our Sydney office on 02 9529 6201 and let’s work together to grow the potential of the financial planning world to help more clients live more happy, flourishing and prosperous lives.

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