Consultative Financial Planning vs. Transactional Financial Planning: Which is Best For Your Career?

While the financial industry is thought to be a very transactional industry, that doesn’t have to be the case. As you’re reading this, you might be ready to align yourself with a firm where you don’t lead with traditional ways of doing business. 

Planning is in our name, and here at Consolidated Planning it’s part of our consultative approach. Our team of advisors implement a number of specialized planning processes that put clients and strategy first, and products second. These planning processes allow our financial advisors to deliver a consultative approach to each and every client. 

In this article, you’ll understand what it looks like to have an emphasis on being consultative. This approach leads to deeper relationships with each family, and/or business that you help, leading to a diversified and successful financial advising career. 

 

What’s The Difference Between Consultative And Transactional Financial Planning?  

Let’s take a look at the differences between a consultative and transactional approach to financial planning. According to Merriam-Webster, a transaction is an exchange or transfer of goods, services, or funds, while consultative means intending for consultation, advisory, or deliberation. 

Chances are if you’re reading this, you see yourself being a financial advisor and are looking to advise people.  

If we are looking at 2,000 fully licensed financial advisors, 1,000 of those align themselves with insurance and the other half with investments, and a client can tell who is who in that first meeting where a product is pitched. 

While these are great models, these are typically transactional, and these types of advisors are ready to sell something. Transact then move on. 

The consultative advisor has insurance, investments, and other solutions in their wheelhouse.  

 

Consultative: You don’t know what [products] the individual needs yet, and they might not fully know either. 

Transactional: You are ready to push products, before evening knowing what this individual might need. 

 

The consultative planning approach at Consolidated Planning means stepping into the future together, with your client. You will be able to identify your client’s strengths, and opportunities, and maybe uncover additional areas they hadn’t thought of before now. 

After all, how can you do planning without looking into the future? With your client, you can better determine what goes where, and where you come into the picture. 

 

Consultative: You take everything into account; assets, liabilities, and cash flow. Each of these areas has an implication for the others. 

Transactional: You are concerned with solving the 1-product problem, with no concern for the other areas of financial wellness.

 

Don’t get us wrong, transactional planning can still build a successful practice and might be exactly what you’re looking for in your career. You might be interested in the bottom line, very product driven, tactical, and ready to work really hard. 

 

Consultative: You are focused on long-term planning, goals, and relationships. 

Transactional: You are focused on today’s transaction and the short-term sale. 

 

Now, what if we told you that focusing on people rather than products can actually make your job as a financial advisor easier and more fulfilling? Yes, you read that right, easier. Even the best salesperson grows weary of the chase at some point. 

 

Consultative: You find yourself growing your current client’s portfolio and less time chasing new clients. 

Transactional: You find yourself always chasing that next client and that next sale.

 

 

How Does A Consultative Approach Build Your Practice? 

Just because a consultative financial advisor isn’t looking to make a quick sale or transaction doesn’t mean that it isn’t a priority. We know, ultimately, you’re looking to build a dependable income and sustainable practice for yourself. 

Both approaches to planning involve some level of relationship building with the goal of building your practice. However, as a consultative financial advisor you will spend more time nourishing current relationships and less time finding new ones. 

We like to call this working smarter, not harder. 

Yes, you can make it with less. Less leg work and fewer clients. As an advisor who helps a family and/or business with many solutions, you’ll find yourself reaching your goals with less than you imagined. 

By following the planning-based process that looks at the whole picture, rather than one transaction, you are able to organically build your practice by nurturing relationships. You’re invested in your clients and want to be their end-all, be-all, in terms of their financial wellness: 

• Personal planning
• Business planning
• Estate planning
• Retirement, 
• And so on.

This leads to building a diversified business. And a diversified business is a sustainable one.

 

Is Consultative Financial Planning Right For You? 

Consultative or transactional? The choice is yours. Advisors at Consolidated Planning are fully equipped to provide a consultative experience with a focus on people and our time-tested planning-based processes. 

Maybe at this point, you’re nodding your head that a consultative approach is the right space for your career, but are unsure of how to implement these practices or how you find your clients. Or maybe you are hesitant about leaving the transactional environment you’ve grown accustomed to. 

The good news is that very rarely does someone come to Consolidated Planning with the knowledge to execute our planning strategy, regardless of experience. With the guidance of seasoned, and high-performing advisors, as well as internal resources, you can learn to be consultative. Leading with people, not products. 

To get started with your consultative financial advising career at Consolidated Planning, reach out to a recruiter to learn more about how we are different from other firms. 

 

 

Exp. 9/2027

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Consolidated Planning, Inc. is an Agency of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Securities products and advisory services offered through Park Avenue Securities LLC (PAS), member FINRA, SIPC. OSJ: 6115 Park South Drive, Suite 200, Charlotte NC 28210, Phone # 704-5528507. PAS is a wholly owned subsidiary of Guardian. This firm is not an affiliate or subsidiary of PAS. This material is intended for general use. By providing this content Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity.