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Why is client well-being increasingly on the agenda for financial planners?

How is your clients well-being?

Client well-being is fast rising up the agenda for financial planners. Why is this and is it something you should be focusing upon with your clients?

In this article I explore why financial planners and advisers are increasingly focusing upon the well-being of their clients.

If you think back only a few years, the subject of client well-being would never have been on the agenda at any financial services industry event.

Yet it is now a much talked about subject. 

Only last week I listened to Michelle Hoskin give an engaging presentation on well-being to a large group of financial planners and advisers. 

A while back I read an interview with Meir Stateman, Professor of Finance at Santa Clara University, and author of ‘Finance for Normal People: How Investors and Markets Behave’. He said:

“The “Main job” of an advisor is to manage a client’s well-being. You want to maximize clients’ wealth, of course; but eventually wealth is just a way station to well-being. As an advisor, you have to be concerned about people’s well-being and listen very carefully to them.” 

So, what is going on? Why is client well-being rising up the agenda so fast?

The meaning of wealth

The way we use the word ‘wealth’ nowadays tends to be in a financial sense. Hence many financial advisory firms call themselves ‘wealth managers’. Yet the origins of the word ‘wealth’ has a much broader meaning. To quote from the earthbound report on the origins of the word:

‘Wealth’ comes from the old English ‘weal’, which means ‘wealth, welfare, and wellbeing’. Weal is in turn related to the older word ‘wel’, meaning ‘in a state of good fortune, welfare, or happiness’.

To live a truly wealthy life it is more than just about the money 

A highly significant shift is happening in society right now. There is a rapidly growing number of people who are realising that materialism does not bring you happiness, contentment, and feelings of well-being. Covid and the consequent working from home has accelerated this for many people.

People want a high quality of life now and not just to exist on the hamster wheel of life waiting for a better tomorrow. Equally, there are a lot of people out there who have everything and yet they are still unhappy.

So, what is the point of providing rock solid, technically brilliant financial advice if clients are still miserable?

A big shortcoming of the financial advice business has been to focus only upon client’s money and not their well-being.

Well, this is changing and the days of offering purely transactional financial advice are drawing to a close.

For a face-to-face financial advice proposition to thrive and be profitable, it will need to bring more to the table than simply providing financial products. 

Focusing upon client well-being is how to create and add more value 

Clients will measure the value they get from their adviser not through the products they buy but from how their quality of life is improving. For example:

*Are their financial decisions aligned with their core values?

*Is worry, anxiety, and stress about money being eliminated and replaced with peace of mind?

*Do they feel confident about the future and what it holds for them?

The skill set of advisers is shifting

Whilst technical ability is important, excellent people skills will be how advisers create value in future.

The ability to connect with clients more deeply, understand them, and craft your advice to help them experience greater well-being will help you thrive in a rapidly changing business environment.

What can you do now?

1. Put your oxygen mask on first. It is next to impossible to help bring out the well-being in your clients if you are not experiencing it yourself. You can read my article, ‘Are you sharpening the saw?’

2. Ask your clients about their experience of life and listen. You do not need to fix, solve, or advise them of what to do about their well-being. Often enough people just want someone to hear them.

P.S. The ‘Financial Planning Power Questions’ card deck is a great resource for intelligent, appropriate questions to ask your clients.


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