5 ways to start financial planning in the wake of DOL fiduciary rule

October 25, 2016 by Brian Sasaki

pile of notebooks on wooden desk next to laptop and smartphone

About the author:

Brian Sasaki

Account executive

Brian started his career working for a large insurance and investment company located in Milwaukee, WI, where he was one of the top financial representative interns in the country.

We are currently six months away from the new DOL fiduciary standard taking full effect, which means many firms are looking for ways to incorporate financial planning into their existing practices. I came from a practice where everyone we met with received a financial plan, and we were doing over 150 plans each year. With that background in mind, I put together a list of five things that make the addition of financial planning to your practice a much simpler process than one would expect.

Simple assessments

The truth of the matter is that most people do not have a financial plan, and they likely have never even been offered one. The biggest hangup for advisors looking to incorporate planning is gathering all of the initial necessary data from clients. Why is the data gathering process such a turn-off for potential clients? Because they do not have the urgency, and they do not recognize the importance of a financial plan.

Prospects and clients do not know what they do not know, and if they don’t know how much or why they need you, they will not have the motivation to do anything for you – in this case, data gathering. That is why Advicent began incorporating simple assessments into our introductory meetings with advisors. We realized the need advisors have to educate their clients on what their current situation is. If the advisor can show them that they are not where they thought they were or that they are not doing as well as they thought they were financially, the advisor can then create that urgency to go through all of the financial planning steps. Advisors can begin to prove their value to clients with this assessment that, at a high level, shows them their current financial situation, engages them in the process, and makes them want assistance to improve their situation.

Modular planning software

No two clients are exactly the same, and we do not want to try fitting a round peg into a square hole. The most common complaints from advisors is that planning takes too long and is not worth the time. The reason planning takes too long is because the advisor is probably doing more work than necessary. Modular planning software allows customization for the specific client an advisor is meeting with. Cutting out two-thirds of the modules and focusing only on what each client needs cuts out on two-thirds of the planning time.

Account aggregation and integrations

There is nothing worse for an advisor than when a client brings in a grocery bag full of paper statements they have received in the mail this year from various institutions. The client does not understand what they are getting and which statements are important, so they leave the mess for their advisor to figure out. It could take hours to comb through and classify all that paperwork by hand, when instead an advisor could be using account aggregation and integrations to feed that entire grocery bag of statements into the plan in a fraction of the time. Integrations are efficient because they do not rely on the getting a client's username and password for their bank account, for example, but "gated" account aggregation is extremely important in order to pull in all the data from held-away assets that your client might otherwise be handing their advisor in physical form.

Electronic fact finding

The electronic fact finding feature is becoming more and more popular in the financial planning process. Advisors spend a large amount of man hours punching data into a financial plan, even after they have spent a couple hours with the client collecting this data in the first place. I have witnessed the use of electronic fact finding in two ways. The first is using it in the intial advisor-prospect meeting. As the advisor is collecting information from the prospect, they can enter it directly into the financial planning software to elimintate the second step of having to re-enter all that data later on. The second means of using electronic fact finding is by the client on their own. E-Fact Finders need to be simple so clients can complete it on their own and then send it to their advisor or planner for further analysis.

Scenario management

When it comes to financial planning, there is always more than one way to make a plan work. Some systems will require an advisor to make multiple plans in order to review which scenario makes the most sense. By having a scenario manager, advisors can cut down planning time by creating one plan with multiple “what-if” scenarios in order to determine which recommendations make the most sense for each individual client. They can then present the best scenarios side-by-side to the client and explain the differenceto help the clients better understand why and how certain financial decisions need to be made.

Advicent empowers you with the tools you need to seamlessly incorporate financial planning into your practice and to help you be compliant in the wake of the DOL fiduciary rule. To learn more about our newest addition to our product suite, the Narrator® Clients portal, click here or call (855) 885-7526 to speak with an Advicent representative.