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How Holistic Planning Can Provide Clients with a Competitive Advantage

Writer's picture: Greg HeathGreg Heath

Robo advisors are projected to manage over $3 trillion in global assets within the next five years, as per industry forecasts. However, certain aspects still necessitate the human touch.


Life and retirement planning go beyond mere numbers, and the most effective financial Planner serve as a valuable resource in turning aspirations into reality. This comprehensive and value-enhancing method in financial planning offers a significant edge over rivals.



This blog will explore the various ways in which financial planners like Pecunia Financial Planning can assist clients beyond just number crunching and efficiently managing retirement portfolios to align with clients' values and goals.


MAIN POINTS

  • Holistic financial planning considers an individual's complete financial picture, ranging from short-term to long-term goals.

  • Holistic planning can also address and often pre-empt major life events like divorce, job loss, or death that can otherwise be disruptive.

  • By adding a human touch, holistic planning can work in conjunction with technologies like roboadvisers to optimise outcomes.


Holistic Planning 101

Instead of just focusing on determining the best portfolio allocations, top financial planners assist clients in addressing important questions such as "where am I headed?" or "what are my goals?"


Put simply, they adopt a top-down strategy to determine "what are your goals and how can we achieve them?" instead of a bottom-up approach that focuses on "how much can you spend?" The emergence of robo-advisors has made this comprehensive approach more essential.


However, what is the true essence of holistic planning?

Imagine a scenario where a potential client visits two financial advisors seeking advice on retirement savings. The initial advisor inputs the client's age and income into a financial model that generates a monthly savings amount based on preset assumptions such as charges, inflation and growth projections. In contrast, the second advisor engages in a detailed conversation with the client to understand their retirement objectives, determining the required amount before considering financial aspects to determine feasibility.


It exemplifies a holistic strategy that centers on real-life objectives before utilizing financial models to inform decisions. Beyond enhancing the quality of inputs for a financial model, this method fosters a stronger bond with the client, enabling a deeper comprehension of their life and retirement aspirations. It's evident why clients would favor this approach over automated systems that depend on generalizations rather than the client's specific circumstances.


How Financial Planners Can Provide Assistance

A holistic approach to providing financial guidance can certainly help craft superior life and retirement plans, but the benefits go well beyond onboarding new clients. There are many times after a client has been onboarded when they may require a financial advisor that understands their individual situation and unique problems. These times present advisors with an opportunity to further build trust and solidify their relationship with clients.


Advisors can provide assistance in various significant life events, such as:

  • Divorce.

  • Buying a home.

  • Sudden job loss.

  • Unexpected inheritance.

  • Critical illness.


For instance, a financial advisor could collaborate with a client to identify the type of home they wish to buy and then assess the feasibility of obtaining a down payment. This strategy may involve evaluating the pros and cons of purchasing a larger home and its potential impact on retirement savings if those funds were redirected. Opting for a smaller home might be more beneficial than investing in a rental property. Both options come with their own set of advantages and disadvantages. By considering the overall scenario, advisors can assist clients in making more informed financial choices in the long run.


Summary

Effective financial planners adopt a comprehensive strategy when engaging with potential or current clients. By initiating discussions from a broad perspective rather than a detailed one, advisors can establish stronger connections with their clients and offer superior service to minimize client turnover. This client-centric approach also serves as a significant defense against robo-advisors, which prioritize generic financial guidance based on general data rather than individual client circumstances.

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Pecunia Financial Planning Limited provides "educational financial services or guidance", which the Financial Conduct Authority (FCA) Handbook PERG 8.26.2 and Section 22 of the Financial Services and Markets Act 2000 state does not require FCA regulation. As we do not sell investment or pension products, these educational financial services fall under the jurisdiction of general consumer laws in the UK, including the Consumer Protection from Unfair Trading Regulations 2008, the Consumer Protection (Amendment) Regulations 2014, and the Digital Markets, Competition, and Consumers Act 2024. The Competition and Markets Authority oversee us.

 

Clients of Pecunia Financial Planning Limited are protected by consumer protection regulations, granting them a private right of action not available to clients of FCA-regulated firms. For additional information see our terms and conditions. Please feel free to contact us.

 

Pecunia Financial Planning Limited is registered in England & Wales under company number 15693682 registered office address 5 The Dingle, Heapey, Chorley, Lancashire, United Kingdom, PR6 9AZ.

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