Financial planners need to rework their value propositions to include more personal, relationship-based skills to help clients during times of financial stress, says the president and CEO of the Financial Planning Standards Council (FPSC).
Cary List told the CFP professional symposium in Toronto on Wednesday that historically some advisors have placed too much emphasis on subjects like which investments should go into a client’s portfolios, over and above the more holistic skills that have typically defined certified financial planners.
Competition from robo-advisors
Part of this emphasis has stemmed from the competition arising from technology, including robo-advisors that List said have commoditized product selection.
Now is the time for advisors to earn clients’ trust by focusing on their specific needs, especially during times of great stress.
“Tomorrow’s financial planners and other allied financial professionals are going to have to adapt,” he said. “They’re going to focus more than ever on developing the skills that technology can’t supplant – things like managing relationships, demonstrating empathy, understanding how and why their clients make the decisions they do and helping to derive the right decisions from their clients.”
Critical thinking and relationship building
Topping the list will be behavioural skills, critical thinking and relationship building, traits that List said have always been more highly valued than just technical knowledge.
He told the financial planners that the future of the financial services industry lies in the ability of advisors to move away from a product-based approach to one that leans more heavily on relationships.
The theme of the symposium was alleviating financial stress. List said certified financial planners can play a major role in helping to relieve that stress by developing sound emotional skills.