Finding Happiness with Your Financial Advisor
Does working with an advisor really make you happier? Possibly..
A recent study by Herbers & Company highlighted the difference in happiness levels between individuals working with an advisor vs. those not working with an advisor. The results stemmed from the firms inaugural 2021l Consumer Financial Behaviors Study. As they shared, the purpose of the study wasn't meant to prove individuals working with an advisor are happier, but its a positive byproduct of the work they did.
Director of institutional research and education for Herbers & Company, Sonya Lutter, had this to say “so we were looking at these levels of happiness, and that’s when we found that people who had a financial advisor were already happier and they were happier with their relationship and communication with their partners.”
Of the happiness factors they were studying, the focus was on four - gratefulness, intention, impact and fulfillment. These factors were heightened among 66% of respondents working with an advisor compared to only 34% who were not working with an advisor. It made me think about these factors and how I’ve experienced them first hand with clients through the years. These are some of the stories & examples I thought about when it came to these predictors of happiness and how our work could help our clients be more happy.
Anytime you create successful outcomes or give a client the financial peace of mind they are looking for, I think you naturally create gratefulness in their eyes. Oftentimes this feeling of gratefulness comes naturally due to the nature of the relationship and work we do with clients.
When I think back to times when clients have expressed truly how grateful they are to work with me, I tend to think of trying or difficult times during a client's life. Covid for one is a perfect example of building that sentiment for clients, although I’m sure any volatile market could present that opportunity. I remember the conversations and planning sessions I had with clients, especially during the worst time when the market was 30-35% off of its highs and we had no idea what was ahead. Giving clients the confidence that they would be ok and basing it on the planning work we’ve already done led to really grateful clients and goes to show the power of planning. Another situation that comes to mind is with a couple I had been working with and the husband had been diagnosed with cancer. All of our meetings prior to this were done together including both husband and wife, however historically the husband had always dealt with the financial aspects of their life. As difficult and emotional as those early conversations were, knowing that no matter the outcome we would be there to help them through this difficult journey they were embarking on gave them the ability to put their full attention on their health & full recovery knowing that their finances were in good hands. The reality is that we tend to work with an older demographic of clients and these conversations can present themselves often. How we handle them and how we connect with clients during the difficult moments shows how valuable our work with clients can be.
Intention is so important in anyone’s financial life, even more so when working with an advisor. Intention is huge in how I approach so many aspects of my life now - with personal relationships, with my family, with my time and with my business. Anything I do, I do so with total intention in mind. I think intention is so important I had a concept for a consulting business named Intent Strategies.
Working with clients you help guide them to be incredibly intentional about their financial life. The really good advisors can carry these intentions over to other areas of their clients’ life. A significant and oftentimes overlooked byproduct of working on your financial intentions with an advisor is finding out what's important outside of just your spending habits or investment returns. Some of the best client-advisor relationships I’ve fostered over the years grew out of the focus of things outside of their financial well-being - what made them most happy and what drew meaning in their lives.
An example that comes to mind for me is working with a young executive of a publicly traded company. She was doing well, enjoyed the work and had tremendous stability in her role. An opportunity came to leave this job and take on a high end role for a much smaller, almost start-up firm. There was a risk involved with this move, as the new position didn’t have the same stability. However the upside was there, as was the culture and environment that was better suited for her life. A few years later this change turned out to be incredibly rewarding - both personally and financially. Being intentional doesn’t guarantee future results, but it does put you in the best position to make a calculated decision and follow the path most meaningful in your life.
Impact can mean so many things to so many people. Impact in your community, impact on your family, impact in business and your profession. Having an impact and forging a legacy is a top priority to many clients I’ve worked with over the years. And impact can come in many shapes and sizes. Whether its helping a client forge a meaningful impact on a local organization like an animal shelter because it was near and dear to their heart to forging the best impact when creating a lasting estate planning strategy. There are so many ways we as advisors can help shape and assist clients with forging the impact they are looking for. Focusing our discussions on these areas can help shape meaningful ways to connect and drive more happiness in their own lives while giving them the resources and foundation to carry it out in whichever way is most important to their situation.
Given the high threshold for estate planning exemptions these days, I’ve read how advisors are de-emphasizing estate planning. To a certain degree this is true, there can be other, less tangible ways to assist clients with estate planning that doesn’t just include how much they will save in taxes because of the right structure of an estate. For those clients who don’t meet the estate tax threshold, focus the estate planning conversation around legacy and IMPACT. You don’t need an estate worth $20 million to leave a lasting impact. We can facilitate these conversations no matter a client's overall net worth.
When it comes to personal fulfillment, I think that oftentimes it comes from achieving ones goals. I can’t think of a profession more aligned with personal fulfillment than being a financial advisor. It’s built around the focus on clients goals (although it doesn’t have to be). Oftentimes these goals can be a long ways off in the future and having the confidence that you are on track or trending towards achievement of these goals is incredibly fulfilling and meaningful. I’ve left meetings where you can see the relief & confidence when you show a client how they’re on pace to reach their life goals. Maybe this opportunity presents itself at times of uncertainty for a client, such as market volatility and they are left feeling unsure. Maybe a life event triggered this uneasiness. Committing to true financial planning and showing the confidence in your work can lead to incredibly fulfilling relationships and outcomes for your clients, leading to a long & happy relationship.
Knowing how these four predictors of human happiness play a role in your client relationships gives us a great framework to better serve clients. Even using this language with clients can help shape certain conversations. I'm already thinking of ways to build a framework around it when constructing ya financial planning process & conversations. Lutter said it best “happiness means that a person’s emotional, mental, physical and relational needs are being met.”
I encourage you to take a look at the study and think of ways to incorporate the findings with not only your current clients, but also tie it into the anecdotal stories you share while continuing to grow your practice. Framing these concepts and relating the personal stories to someone who is considering working with an advisor could be the final push in getting them on board. Put that prospect in the shoes of a current client success story by showing them the importance and value of a happier (financial) future.
Written by: Ryan Bouchey