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Are FAs Seeking Clients All Wrong?

December 10, 2018

Financial advisors may need to change tack on how they approach looking for clients. While most Americans want to have a financial plan, many never get one — and advisors may be partly at fault for not engaging with potential clients early on in their wealth-accumulation phase, according to a recent survey.

Around 75% of American adults say they need a “firm financial plan,” according to a recent survey by Citizens Bank Wealth Management and Mintel cited by WealthManagement.com. But only 55% actually end up having one, the survey found, according to the web publication. And aside from the obvious benefits of having such a plan, such as helping savers meet their financial goals, financial planning helps with an overall sense of security and reduces stress and anxiety, WealthManagement.com writes.

So the financial advice industry needs to examine why someone would want to have a plan but wouldn’t get one, Jay Friday, the head of financial planning for Citizens Bank Wealth Management, tells the web publication.

Part of the problem, according to Friday, is that advisors look for clients who already have some minimum of investable assets — but many consumers want to have a plan before they save $250,000 or more, he tells WealthManagement.com. Robo-advisors such as Betterment and Wealthfront filled in where traditional wealth managers didn’t engage, but Friday tells the web publication that they don’t “go far enough.”

Friday says traditional financial advisors could offer “modular options” of pricing in the meantime, according to WealthManagement.com.

College graduates, for example, could be charged a fraction of a fee just to focus on how much they should be saving, he tells the web publication. And this approach would help advisors build trust with clients, Friday tells WealthManagement.com.

By Alex Padalka
  • To read the Wealth Management article cited in this story, click here.