Instead, you could say, “John, we think about money as a tool that helps us live our best life possible. And while part of our role is to help you make smart decisions about how your money is managed, we also want to understand what your money is for, what you want it to do for you. So I’d love to get a sense for what gets you up in the morning. If there’s anything you can share in that area, it might help us as we discuss the best ways to use your money, to invest your money so it supports the purpose you see for your money.”

Goals

“Goals-based financial planning” has become popular in recent years as a way to directly tie how a client’s money is managed to specific financial goals they want to achieve. It makes sense albeit with one caveat—what if a client doesn’t know what their goals are?

When a client doesn’t know what their goals are, you have a great opportunity to put your “coach” hat on, help your client dream a bit and add real value to their life. Through a series of questions, you can help your client home in on what they want their money to do or provide for them. And their goal could be as simple as getting to the point in life where they don’t have to worry about running out of money. Or maybe they have a series of goals and you design buckets of money that are allocated to those goals.

Behavior

Vanguard has spent years researching what they call Vanguard Advisor’s Alpha. This is a framework to describe the value a financial advisor adds to the client relationship. Essentially, Vanguard says the value an advisor provides is not in trying to “beat the market,” rather, it’s “by providing relationship-oriented services—such as cogent wealth management via financial planning, behavioral coaching, and guidance.”

In real numbers, Vanguard says the behavioral coaching value of an advisor is worth on average 150 bps per year, while portfolio construction and wealth management make up another 150 bps, for a total value of about 300 bps. 

Communicating Your Value

How do you make things like values, purpose, goals and behavior more tangible so clients can get a sense for whether or not that’s worth paying 1 percent or more per year to you?

Lennick says, “The whole idea is the value of the advisor is to help the client align their behavior, their decision-making behavior, and their investment behavior with their goals, with their sense of purpose and with their values.” And for clients who receive this type of value from their advisor, “that's a big deal,” says Lennick.