Avoiding awkward conversations about spending habits

August 18, 2016 by Shawn Preisler

A young man using a tablet to check on his financial plan to avoid bad spending habits

About the author:

Shawn Preisler

Regional sales director

Shawn has more than 15 years of experience in the financial services industry and has held leadership positions in both the broker dealer and RIA space. Shawn leverages his vast industry experience to help investment firms implement financial planning technology solutions which allow their clients achieve financial success.

One thing I really like about my job at Advicent is that I get to travel around the country meeting with financial planning firms and learning about a wide range of business models. Getting to meet the people that work at these firms helps me understand how each firm is different, which in turn helps us formulate solutions for those firms using the different software platforms that we offer.

A common problem facing advisors today

While a lot of what I experience is how firms are differentiating themselves, I also hear a lot of challenges those firms have in common. One of the challenges that many firms experience is that their clients have spending habits that go directly against what their financial plan states they should be doing in order to achieve the goals outlined in their plan. This conversation is brought up so often that I cannot remember the last meeting I attended where the topic of clients outpacing their budgets did not come up.

Where advisors seem to be challenged most on this topic is in the uncomfortable conversations that occur between the client and advisor. Complicating matters further, most times when an actual written financial plan is in place, its generally only updated annually, which means that by the time these uncomfortable conversations come up with the client, a full year of overspending has already taken place.

When it is time for that conversation, the client is not just upset that they are being asked to rein in the spending, but they are disappointed that the goals which they are hoping to achieve are now a little bit further off in the future because they did not commit to the budget outlined in the plan.

Empowering clients to adhere to a financial plan with Narrator® Clients from Advicent

When I hear this, I am always excited to talk about our Narrator Clients technology which pretty simply solves the problem of having to have this difficult conversation with clients going forward. Beyond the many other features that the Narrator Clients platform offers, it enables advisors and clients to work together and eliminate these overspending situations which often lead to difficult conversations.

With the personal financial management (PFM) feature offered within our Narrator Clients platform, advisors can work with clients to set up a budget and then track the progress on a daily basis. Clients will see firsthand when they are approaching or exceeding their assigned monthly budgets. With their budgets visualized and monitored on a daily basis, there is a constant focus on staying within budget and ultimately providing a higher probability of achieving their goals.

This technology is invaluable to advisors who work hard to enable clients to achieve their goals. Imagine how much easier those budget conversations will be when there is consistent collaboration between the client and advisor and there is technology to support the relationship on a daily basis, rather than waiting for the annual plan review meeting to arrive. Putting this technology in place turns what was an uncomfortable conversation in the past into coaching opportunities and relationship-building between clients and advisors.

Help your clients make a change in their spending habits

Keeping budgets in check and ensuring clients have technology that enables them to bring a daily focus to their finances is one of the best things an advisor can do to streamline their business, and give their clients the resources they need to be successful in achieving their goals.

If you are struggling with clients who are negatively impacting their goal progress due to bad spending habits today, let us help you understand how we can eliminate those behaviors and provide budget visualization to your clients by using our Narrator Clients technology.

Click here to learn more about Narrator Clients and the other industry leading financial technology solutions offered by Advicent, or call (855) 885-7526 to speak with an Advicent representative.