Personalized financial advice is coming to the forefront in many companies.
When it comes to personal finances, Americans are now seeking a “little of that human touch,” an expression made famous by Bruce Springsteen. Many workers would like personalized financial advice from a financial advisor. Many feel they can benefit from a more personalized approach to understanding their money. This is increasingly important now amid soaring inflation, high interest rates, and an imminent recession.
A new study from eMoney Advisory, cited in a recent BenefitsPro article, found that individuals want “personalization, peace of mind and the ability to act. They also need/want advisors to factor in all aspects of their lives – meaning getting into the numbers, their personal situations and making them feel seen and heard.”
And when financial advisors meet with prospects or clients, they should make sure what they’re presenting is easy to understand. Personalized financial advice provides plenty of opportunities for individuals to ask questions. The eMoney Advisory study also found that “while consumers are seeking advisors for their professional help and support, only 39% are confident in being able to achieve their financial goals, and 49% are using negative words such as stressed, worried, overwhelmed and unprepared.”
Financial advisors should be thinking of an individuals’ situation and goals holistically. This means, reviewing every aspect of their lives. The eMoney Advisory report defines financial wellness as “‘a healthy relationship with money and a positive state of being resulting from one’s personal finance situation and the impact it has on other aspects of life, such as your mental, emotional, physical, relational and spiritual health.’”
According to BenefitsPro, “However, when asked about underestimating the importance of financial wellness discussions with clients, only 64% of advisors said their clients place importance on financial wellness. However, when asked the same question, 88% of clients say financial wellness is important to discuss with their advisor. Similarly, advisors said 67% of their clients are receptive to financial wellness discussions but a staggering 90% of clients say they are receptive to the discussion.” Strong communication between advisor and client can go a long way towards delivering the feel of personal financial advice.
The report also found that many Americans are feeling financial stress—an ongoing issue that employers and financial advisors must find ways to address: “…according to eMoney’s data, the top concerns for 2022 were inflation (75%), grocery prices (64%), gas prices (61%), and, paying bills (65%). Much of this started with the pandemic but continues today and now lingers. Further down on the list was being able to provide, having a home, job security and recession,” the BenefitsPro article noted.
When it comes to holistic planning, eMoney found that advisors are comfortable discussing the technical aspects, but not so much the personal, such as divorce, pre-marital planning, and death. However, holistic planning and a more personalized approach could result in advisors feeling like they’re spread too thin, which can be solved in part by having solid systems in place to serve clients. According to the eMoney report, “Things like the importance of technology are critical to an advisors’ firm (more than half surveyed feel that way) and 39% said it’s very important. No one said it’s not important at all.”
