Financial Planning for Client Acquisition Success

Secrets of Success

LPL Financial set out to discover the characteristics and habits that set high performing financial advisors apart from their peers. Previously, we explored strategies for creating efficiency in Increasing Client Acquisition Success with Outsourcing. In this follow-up, we’ll see how top advisors leverage financial planning to drive growth.

The New Normal

Being a financial advisor is taking on new meaning as 98% of end-investors seek more holistic advice.¹ With the largest generational wealth transfer in history underway and millions of Americans experiencing key milestones like graduation, marriage, first time homeownership, and retirement, there’s never been a better time to do what you do best. In fact, Cerulli projects that the advice market will go from $33 trillion to $43 trillion over the balance of this decade alone.²

The data on this is compelling as well. A decade ago, 35% of investors said it’s important to have a written financial plan. Today, that number is over 60% while roughly only 40% actually have a plan.³ If we reach 60% of investors actually having financial plans, we are likely to see a tipping point that will propel that number much higher in the future. In fact, this wave of planning may ultimately resemble the transformation from brokerage to advisory we’ve experienced over the last 20 years.

Consider these findings from the 2020 Global Trust Report by the CFA Institute:

• 70 percent of U.S. investors believe a financial adviser will be more important in the next three years.
• 81 percent of U.S. investors use a financial adviser as their preferred source for trusted advice.
• 73 percent of global investors prefer a human adviser over a robo-adviser.
• 48 percent of global investors would pay more for personalized services.

It’s clear that the demand for personal, holistic financial advice is on the rise. How can you leverage this trend and establish yourself as a go-to resource for clients and prospects?

The Power of Financial Planning

In LPL Financial’s study of over 500 high performing LPL advisors, financial planning was listed as one of the most significant drivers of their success and increased client engagement. By nature, financial plans are deeply personal and involve a degree of trust between client and advisor. You’re not just managing a portfolio, you’re helping a client pursue their dreams and goals. The care and communication involved in creating and maintaining a financial plan demonstrates value and can provide a differentiated service experience that strengthens client retention and generates referrals.

Generational Planning

Because financial plans are designed to be long-term tools, often culminating in a legacy for loved ones, they provide a natural gateway for building multigenerational connections. Millennial clients in particular are eager to connect with financial advisors.

According to the Millennials Want More Advice—And Are Willing to Pay for It report from Cerulli, 59% of Millennials identify as advice seekers who want more financial advice than they currently receive. They are interested in new ideas—and most importantly—are willing to pay for that advice.

“Active interest in their finances also means Millennials would be most likely to come to meetings and be open about what they are looking for, potentially enabling development of a strong two-way relationship with their advisors,” says research analyst John McKenna.

Despite rising wealth, this group remains a largely untapped market. Cerulli estimates Millennials had an average net worth of more than $278,000 in 2021—an average yearly increase of 23.1% since 2016, which is the highest growth rate of any generation.

“Taking care of Millennial clients in their wealth-earning years is a largely untapped market for book-growing advisors. It is also a client base that could be loyal for the next 40 years if an effort is made to bring them into the fold early,” concludes McKenna.

Gain a Competitive Edge with LPL

Advisors across the industry are realizing the power of financial planning. With 150,000 advisors currently offering these services to their clients and more than 20,000 expected to offer them within the next three years, it’s an incredibly powerful part of your value proposition.⁴ But it’s also a time consuming one.

LPL Financial’s Paraplanning Services provides the expertise and scalability you need to put financial planning at the core of every client relationship. The team operates as an extension of your practice, working together to learn about your clients’ needs. Paraplanners gather and input data into financial planning software—such as eMoney, WealthVision, MoneyGuidePro, and Right Capital—to generate insights and provide you with a complete financial plan for your clients. This plan becomes the guide for you and your clients, with plan maintenance available on an annual basis.

If you don’t want to outsource financial planning, you can expand your planning knowledge and learn what it takes to go deeper with LPL’s Financial Planning Group. This team provides guidance to advisors who are interested in turning financial planning into a new revenue stream, whether it be a subscription model or fee-based service.

Your High Performance Partner

At LPL Financial, we have the dedication, expertise, and tools to help you become a high performer. If you’d like to learn more about how we can help you harness the keys to increasing client acquisition success, contact us for a confidential conversation.

¹ Accenture Wealth Manager Consumer Report (2021)

² Cerulli Associates, Market Data Report (2020)

³ Cerulli Associates, Market Data Report (2020)

⁴ Cerulli Associates, Wealth Institute, FPA