How do client-financial planner relationships evolve?

(Photo: fizkes/Adobe Stock)

The relationship between financial planners and their clients has changed significantly over the past 15 years. That’s according to a study by the Financial Planning Association (FPA) and Allianz Life detailing emerging trends during this period and how they are affecting the industry.

“Financial planning is a highly relational profession, which means this important research has great consequence for financial planners and their engagement with clients,” said FPA President Dennis Moore.

Among the discoveries:

Clients want at least some virtual engagements with their planners, even after the pandemic.

  • More than half of customers expressed a preference for virtual meetings even after the end of pandemic meeting restrictions, whether used exclusively (29%) or with occasional in-person meetings (28%).
  • Planners also prefer virtual meetings. Before the pandemic, one in five people had never held a virtual meeting, and just under half had only used them “sometimes”. Now, eight in 10 plan to use virtual engagements at least some of the time in the future, 37.5% plan to use virtual meetings most of the time, and 7% plan to use them exclusively.

Planners need to reassess their methods of getting to know and understand their customers.

“Because financial planning is a highly individualized process, one of the primary goals of financial planners should be to conduct a qualitative data collection process that enables and encourages clients to communicate their values, priorities, hopes, and concerns,” said Carol Anderson, president of MQ Research & Education.

Financial planners need more training to recognize and manage clients’ financial anxiety.

  • Planners have grossly underestimated their clients’ financial anxiety. On average, planners thought financial anxiety affected about half of their clients. However, more than seven in 10 people reported experiencing financial anxiety at least half the time.
  • Clients’ financial anxiety decreased their ratings of the planner’s ability to provide services related to each communication topic explored in the research and all but two communication tasks and two communication skills.

Financial planners can be overconfident. Planners consistently rated themselves higher than their clients for every communication topic category. These results were a complete reversal of the original 2006 study, when clients rated their planners higher than the planners themselves.

Diversity, equity and inclusion efforts in the financial planning profession are having an impact.

  • Financial planners participating in the research were a more diverse group than in 2006. Thirty-eight percent of participants were women, up from 27% in 2006, and nearly 6% of planners reported a non-cisgender sexual orientation.
  • Thirteen percent identified as non-white and 15 percent were of Latino, Latino or Spanish descent.



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