According to CFSI, “For consumers, improved financial health is a gateway to other goals and dreams; it is closely tied to mental and physical health, family stability, education and economic mobility. For providers, focusing on consumer financial health provides a business opportunity to expand into new market segments, increase customer loyalty and drive long-term revenue streams, while addressing unmet market needs. Incorporating financial health indicators into regular business practices and key performance indicators (KPIs) is the key to unlocking deep insights about the state of customers’ financial health and identifying the products, services and strategies customers need to improve it.”
Advisors are encouraged to use tools that enable your clients to engage with these daily metrics so they feel involved in real life decisions and their daily transactions will create and power a “living plan”—one that’s not just updated annually, but rather is updated frequently with actionable intelligence for them. It’s critical not to just focus on your client’s wealth, but also to help improve their financial health, which has generally been outside the purview of many financial firms for a long time.
To help be successful in creating this living plan, I recommend the following three steps:
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Pick a tool/process that you and your clients understand; it should measure capacity and willingness to take risk.
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Broaden the view beyond your advisory assets to focus on your client’s overall financial health.
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Integrate this into your offering not only from a process and procedures standpoint, but also holistically into your client portal and communication strategy.
Blake Wood is senior vice president and director of program innovation at Envestnet.