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 (KinderInstitute.com).
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.