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Financial Planning > Behavioral Finance

Does Your Advisory Firm Really Have an Answer for the Robo Threat?

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One of the predictions for the coming year that I made in my last blog (Dec. 30; Advisor Future Shock: Rising to the Robo Challenge) was that the growth of automated online advisory platforms (the so-called robo-advisors) will force financial planners to ramp up their “selling” of financial planning.

While some “robos” still augment their revenues by referring users who want financial planning or other personalized financial advice to brokers, a growing number of them are discovering the greater profit potential of adding automated financial planning to their service menus.

I think most of us an agree that, so far anyway, “automated” financial planning platforms fall far short of the personalized services offered by today’s human financial planners.

Yet as Amazon and the Internet itself have done to retail merchants, robo financial planners will change the conversation, and force human planners to articulate their value proposition beyond simply “having a financial plan,” which has resonated with clients—until now. 

To address the challenge of actually “selling” the benefits of working with a human financial planner, AssetMark has added a “Purpose Based Financial Planning” module to its TAMP platform. Based on the “Money Quotient” system, “Purpose Based” planning has similarities to George Kinder’s “Life Planning” program (

However, its language and approach are different enough to resonate with a different set of planners—and clients.

The Purpose Based Financial Planning approach is centered around five steps for client engagements:

1) Explore. This is the initial data gathering step. It’s designed to determine the client’s issues and concerns, and to assess the “scope” of the engagement: that is, the client’s needs and which of them the planner can and wants to address. 

2) Engage. This step helps planners create a meaningful relationship with their clients (rather than a salesperson/customer dynamic), by enabling them to fully understand the clients’ “values and priorities.” By not only demonstrating that the planner wants to understand where the client is coming from, but actually does understand, a planner creates a bond with the client, and often helps clients to more clearly understand their wants and needs, as well. 

3) Envision. This is the stage in which the planner helps the client to create a clear, concrete vision for the rest of their lives. As veteran planners know, this is often something that clients are often reluctant—or even afraid—to do. And consequently, can result in great relief once they are skillfully encouraged to do so.

4) Enlighten. This is the presentation of the financial plan that will make the client’s vision into a reality.  The key element at this stage is to clearly explain how the financial solutions in the plan can support the client’s vision. At this point, AssetMark also recommends that planners communicate their “commitment to put their clients’ interests first.”

5) Empower. This final stage is the ongoing planner/client relationship, during which planners implement the agreed upon plan, monitor that plan, regularly review the progress toward those goals, and help the clients “to maintain focus on their personal and financial goals…ensuring the plan remains relevant throughout the client’s financial life journey.” 

The “Purpose Based Financial Planning” program also works with planners on how to conduct themselves in the above conversations: ask and listen; let clients talk; discuss the bad as well as the good; keep it simple; and, encourage an ongoing dialogue. “We have a lot of planners in our system, and many of them are uncomfortable with the soft conversations,” explained Matt Matrisian, senior VP of practice management and strategic initiatives at AssetMark.

“This approach is not just about advisors helping clients meet their long-term financial goals,” Matrisian told me. “It’s about advisors seeking to align their clients’ life goals with investment solutions that empower them to invest with purpose. Taking the time to listen and find out what your clients really want in life, and then helping them to establish purposeful goals, will build stronger relationships and reap greater rewards.”

Veteran financial planners may scoff at AssetMark’s “purpose based” approach as being too basic, or much of what they’ve already been doing for years. But with digital technology encouraging both clients and would-be clients to ask why they need more than a “basic” financial plan—and need to pay more than a handful of basis points to get it—it’s time for all financial planners to review their “value proposition” and whether the way they “sell” is truly resonating with today’s clients.


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