Consultative Financial Planning vs. Transactional Financial Planning. Which is Best?

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While the financial industry is typically 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 transactional 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 client and strategy first, and products second. Said another way, products follow strategy.  These planning processes allow our financial advisors to deliver a consultative approach to each and every client. 

In this article, you’ll understand the ways in which Consolidated Planning puts 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 Approach: You don’t know what [products] the person needs yet, and they might not fully know either. 

Transactional Approach: You are ready to push products, before evening knowing what this person 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. This happens through meaningful conversations where qualitative data is collected. After all, how can you do planning without looking into the future together? You will determine with your client, what goes where, and where you come into the picture. 



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

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

Most consumers want one trusted advisor to integrate and coordinated their financial products, not just sell something. Don’t get us wrong, transactional planning can still build a successful practice and might be exactly what you’re looking for in your financial advising career. You might be interested in the bottom line, very product driven, tactical, and ready to work really hard.



Consultative Approach: You are focused on long-term planning, goals, and relationships, and growing your client’s portfolios.

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

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. This is true for a few reasons:

  • The Pareto Principle: 80% of your business will come from 20% of your clients
  • Retaining clients takes less effort that acquiring new ones 


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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 sustainable practice for yourself. 

Whether a transactional or consultative financial advisor, both involve relationship building with the goal of building your practice. However, as a consultative financial advisor with Consolidated Planning, you 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 our planning-based processes that look 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, retirement, therefore building a diversified business. 


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 proven 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 and trainings, you can learn to be consultative, leading with people, and 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


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2022-146711 exp. 11/24

Published:  November 22, 2022