“Planners have to realize there is a difference between financial stress and financial anxiety,” Anderson explained. “Financial stress can be alleviated by a change in circumstances. Financial anxiety is much more pervasive, and often the clients can’t identify what is causing their anxiety. And improvements in a client’s financial life doesn’t necessarily alleviate that anxiety.”

In fact, she said, a planner can show this kind of client hard numbers that prove they’re in a good financial position, but that won’t translate to ease of mind—and this whole dynamic can become very awkward.

“Planners tend to be uncomfortable with client emotion, and yet emotion is so embedded in their clients’ financial life,” she said. “Helping the client requires helping the planner to recognize what these different characteristics are and some techniques for handling them. This is going to be part of their work whether they like it or not, so they might as well get used to it and accept it.”

One thing a planner can do is find a tactful and kind way to connect such a client to counseling services through which the anxiety could be addressed, she said. Another avenue for identifying which clients might benefit from counseling would be to incorporate a brief financial anxiety scale into the client intake process.

All of this matters, the study found, because clients don’t actually evaluate planners on performance, or make referrals based on performance either. That’s because true performance takes years to be able to assess. Instead, clients evaluate their planners based on relationship, and it’s the quality of the relationship, not the ROI, that leads to referrals.

“There has been such an emphasis on performance and return for so long. That that’s what planners have built their approach on—they have a better method. But they can’t make that promise. There are too many factors that go into return,” Anderson said. “They really need to be building their relationships on understanding a client’s needs and responding to those needs. Performance alone does not support goals.”

However, there is some good news coming out of the 2021 study as well, and that is that clients want at least some virtual engagement with their planners, even post-pandemic. Some 57% of clients expressed a preference for virtual meetings going forward, whether used exclusively (almost 29%) or with occasional in-person meetings (28%).

Planners also expressed a significant preference shift for virtual meetings. Before the pandemic, one in five had never held a virtual meeting, and 46% had used them only “sometimes.” Now, 80% expect to use virtual engagements at least some of the time going forward, about 37% expect to use virtual meetings most of the time, and 7% expect their exclusive use. 

The research, fielded May 25 through June 15, 2021, ended up qualifying 352 financial planner responses and 429 of their clients. The full study is available at the FPA website.

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