How Can Financial Advisors Add Comprehensive Planning Services To Their Practice?

Most financial firms focus exclusively on one area of financial planning, typically insurance or investments, but market themselves as comprehensive planning advisors. 

As an advisor working at a product-focused firm, it can also be frustrating when you don’t have the tools or processes to deliver financial planning to clients. This frustration is compounded when the work your firm does for clients doesn’t align with the comprehensive planning approach your firm markets to clients.

Consolidated Planning understands this frustration and empowers advisors to deliver genuinely comprehensive planning solutions to their clients. Over 40 years, we’ve developed a proven process that positions you as the trusted advisor for all of your client’s financial questions. From our planning philosophy to our internal advisor support teams, we’ve built our firm to allow financial advisors the ability to help 25-30 families with their planning needs each year.

If you’re a financial professional considering expanding your service offering to include full financial planning services, this is the article for you. You’ll learn the pros and cons of running a planning practice and how Consolidated Planning helps product-centric advisors transition to leading with financial strategy and planning. Armed with this information, you’ll know if a planning practice is a good fit for your goals and how to start implementing planning services in your practice.

What Is Comprehensive Financial Planning?

Let’s start by defining comprehensive financial planning. At Consolidated Planning, we define comprehensive financial planning as a process that attempts to optimize and align the four primary domains of a client’s financial life. These four domains are:

• Assets – What you own.
• Liabilities – What you owe.
• Protection – What happens if something goes wrong?
• Cash Flow – How money moves into and out of your life.

Comprehensive planning advisors often follow a planning philosophy to help guide clients toward their goals. This philosophy creates the framework for implementing a repeatable process to review and monitor your client’s progress. Ongoing review and course correction is an additional differentiator between a planning advisor and a product salesperson.

Why Should An Advisor Offer Comprehensive Planning Services?

Many financial professionals earn excellent incomes selling products without the added stress of coordinating a financial plan. Maybe you’re making a great living currently, and you’re wondering if you should rock the boat by adding planning to your practice. So why should you start offering comprehensive planning services to your clients?

There are several reasons why you should focus on planning not products, but the most important reason is that you believe your clients deserve the best help you can possibly give them. You don’t have to know everything there is to know about financial planning when you are getting started, but you must believe in the planning process.

If you don’t believe that a planning approach will deliver better results for your clients, then you should not add planning services to your practice. If this sounds like you, stick to product sales. You’ll be happier and find success more quickly.

Now, if you believe in planning, here are a few additional reasons to shift from transactional to consultative advising. Integrating new processes and philosophies into your practice will take some work, so use these 3 reasons as motivation to keep going when you run into inevitable bumps along the way.

1. Clients want comprehensive financial advice. The average person has at least three financial professionals in their life, but what they really want is one trusted advisor to coordinate their financial life.
2. Planning clients are more satisfied than transactional clients. Clients engaged in an ongoing financial planning relationship with an advisor feel more confident in meeting their goals. As a result, they are more likely to give you referrals and remain clients long term.
3. You’ll earn more as a planning advisor. The comprehensive nature of planning and the one-stop shop approach leads to capturing more wallet-share from your clients.

How Comprehensive Planning Benefits Our Clients

We just shared how comprehensive financial planning benefits you as an advisor, but what about your clients? Will they benefit from your new services?

Absolutely.

Your clients will be blown away when they are introduced to the Consolidated Planning Process. For the first time, they will see their entire financial picture organized on a single screen, and at that moment they’ll realize just how different this process will be from anything they’ve experienced. 

In fact, it’s an experience so different that yields measurably different results. A study conducted by Vanguard found that comprehensive advisors can increase client’s net return by up to 3% or more each year.

Additionally, we’ve found that our retirement income strategies produce 50% more income on average for clients when compared to traditional interest only retirement income strategies. However, these strategies are only possible through comprehensive planning.

In addition to measurable benefits like improved returns and increased cash flow, comprehensive planning benefits your clients in several non quantifiable ways. The planning process brings clients clarity around what they want and don’t want in their lives. The ongoing review and monitoring creates a sense of security for clients as they know where they stand.

How Are Financial Advisors Compensated For Financial Planning?

You may be wondering how you’ll get paid for these new services you’re offering. After all, more work should translate into more money, right?

Financial advisors are compensated a few different ways for their financial planning services. Some advisors charge their clients monthly or annual planning fees that correspond directly to an agreed upon scope of planning. This is often the cleanest and most straightforward way for both you and the client to place a value on the planning benefits you provide.

However, not all advisors charge planning fees. These advisors are compensated through assets under management fees and commissions from any recommended products throughout the planning process. This method of compensation can be fuzzy in terms of tying into the value of your planning work, but some advisors believe it’s easier to operate within the traditional compensation structures to which their clients have become accustomed.

What Will Offering Planning Services Do For My Practice?

Offering comprehensive planning services to your clients will improve the strength of your practice. Your actions will be aligned with what the financial services industry claims to be for clients, but often falls short of delivering. 

Planning will give you the framework to build a financial planning practice that empowers you to help 125 families over the next five years. With a repeatable process and satisfied clients, your practice will thrive. In our experience, new planning advisors with Consolidated Planning earn over $250,000 within five years. Established advisors typically double their revenue over that time period when they add planning services to their practice. 

Our team is here to help you make the transition from transactional advisor to a comprehensive planner. Reach out below to receive a custom playbook detailing how planning will transform your practice.

 

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