Asking Better Questions To Drive To The Next Best Action
Over the years Heather Kelly, senior vice president of Allianz Life, has seen her share of client journeys—financial product roadmaps that may be employed throughout the lifetime of a client. “Fortunately, our industry has evolved well past the days of advisors as product-focused individuals. The focus has shifted from the benefits of a singular product to recommendations working in concert to achieve objectives. Today, advisors ask more meaningful and profound questions to elicit better insights from their clients,” says Kelly.
On a daily basis, advisors are tackling tough scenarios, says Kelly. “For example, many clients are dealing with caring for elder parents or loved ones. They ask their advisor to help develop strategies and elder care options—and how to pay for them. It’s not just asking a spouse if they’re OK with Mom coming to live with us, it’s about having tough tradeoff conversations, giving both members of the couple/partnership a voice in making the right financial and emotional decisions that everyone can be comfortable with. That’s not easy to do. It takes training, heart and some wisdom, too,” says Kelly.
The good news, according to Kelly, is that as advisor team models become more prevalent, emotional intelligence skills combined with technology can help propel the “next best action”—that’s the preferred action that clients are encouraged to take. “Even in our world of annuities and insurance, we’re starting to see gamification as a tool helping clients improve financial literacy, learn about themselves, and spot new opportunities to improve their overall financial wellness. This is an exciting development, and it all starts with asking better questions,” adds Kelly.
Beyond gamification, online assessments, and digital tools, the industry is ripe for some new blood. “We have many para-planners or junior advisors waiting in the wings to take on their own book. I have seen senior advisors do an impeccable job of mentoring the next generation of advisors, but they also need to continue to evolve,” says Kelly.
“Studies have shown that the typical financial advisor is a 57-year-old white male. That needs to change,” says Kelly. “They need diversity, equity and inclusion (DEI) and appropriate training (and many have already embraced and done so…). Advisors need to be able relate to things like blended families, gay marriage, other aspects of modern families, and cultural aspects to best serve their clients.”
She adds, “Advisors are aging, and many will be retiring over the next five to10 years. Wealth management firms need to continue to deliberately recruit and groom advisors from varied backgrounds and equip them with the necessary education. This is particularly important to instill confidence in the next generation of wealth. We are on the verge of significant wealth transfer; people want to work with and trust someone who is relatable to them—someone who looks like them.”
Seeking Support From The Advisor Community
Over the next year, Next Chapter*, an industry wide group of leaders and innovators from the financial services community, seeks ways to incorporate financial literacy, emotional intelligence, and empathy trainings, tools, and resources into everyday activities for advisors to better serve their clients.
To build alignment across the industry, Next Chapter seeks use cases for:
Best Practices Of Communications
• Is there a rating of communication effectiveness by advisors? Results?
• What do leaders do?
Financial Literacy
• Examples of advisors/firms delivering financial literacy efforts
• Should the industry create and endorse a standard of financial literacy, outlining basic issues clients should know?
• Should the industry supply clients with a glossary or other basic education about important topics of retirement planning?
Empathy And Emotional Intelligence
• Best practices use cases for how E&EI are included in advisor training?
• What digital tools can provide E&EI and what topics should that capability address?
• There are many efforts that support better engagement with women and other family members—can we review and promote capabilities as more standard industry practice?
If you or others at your advisory firm can provide details on any of the above scenarios based on your work with existing clients, please contact Steve Gresham at [email protected].
David Conti is a N.H.-based writer, editor and content marketing consultant. He was an editor at Fidelity Investments and now writes about personal finance, retirement, aging and wealth for several national publications. Contact him on LinkedIn.
*Working for the greater good, a group of more than 30 industry leaders built Next Chapter—a think tank/take action team focused on retirement. It’s sponsored by the Execution Project, Financial Advisor and the Money Management Institute, and we are working on behalf of the MMI’s 180+ member companies and FA’s 200,000+ advisors.