Robust client relationships focus on wealth and health

The idea of holistic financial planning represents the steady evolution away from a strict focus on investments, but 2020 has introduced a unique opportunity to characterize holistic as a coupling of wealth and health.

“You can’t be wealthy if you aren’t super healthy; there is an intersection between wealth and health,” said Lindsay Troxell, director of Knowledge Labs Professional Development at Janus Henderson Investors, speaking on a panel at the InvestmentNews 40 Under 40 Future of Our Business event on Monday.

“Advisers are starting to recognize that the idea of holistic planning has changed,” she added. “I don’t think most advisers got into the business to talk to people about health and wealth, but the complexities of the world are changing.”

During the virtual conference recognizing the InvestmentNews 40-under-40 class of 2020 and incorporating former honorees, Troxell and co-panelist Ryan Tiernan, senior national accounts manager at American Funds, described a holistic connection between health and wealth as fertile and necessary ground in financial planning.

Moderator Richard Cresta, senior vice president at Fidelity Investments, said the advice industry can no longer just focus on investment management.

“Money management has become very commoditized, and advisers are looking for greater efficiencies in the way they manage money,” he said. “It is now around these questions of health and wealth.”

Troxell said the trend of "looking at the whole person," which is already at play in some areas outside of financial services, is training consumers to expect more integration in all the services they receive.

“Advisers are opening their eyes and realizing they have to become holistic, because we’re sicker and we’re living longer,” she said, explaining that holistic goes beyond just considering things like demographic profiles to include a psychographic perspective on the fears, beliefs and interests of clients.

[More: View the 2020 40 Under 40 class here]

“Those advisers that don’t embrace it will be left behind, because clients are going to be asking for it,” Troxell said.

Tiernan credited the coronavirus pandemic with adding momentum to the holistic planning trend.

“As we rolled up to this pandemic, advisers shifted to becoming life, career and asset coaches,” he said. “Disaster calls for discipline and clients are looking for that and they’re looking for a trusted source, and advisers have the opportunity to be that trusted source.”

Even with the future of the pandemic and an ultimate cure or vaccine for COVID-19 unclear, Tiernan said it has laid the foundation for advisers to expand their expertise into areas related to health and wellness benefits, many of which go underutilized by employees.

Helping clients navigate those services “should be part of your practice indefinitely going forward,” he said.

“What you all bring to the equation is the human element,” Tiernan added. “Not many people would coincide the two terms wealth and health without help, so get your clients to start talking about it. Ask them about what their employers offer. Clients have access to a lot of great tools they’re not accessing.”

The panelists agreed bringing up the subject of a person’s health can be awkward and unfamiliar to many financial advisers.

“'Can you afford to get sick?' is a great open-ended question,” Tiernan said.

Troxell said financial advisers might need to rethink the way they communicate with clients to delve into health-related topics.

“If you are uncomfortable bringing it up, ask yourself why,” she said. “If we’re thinking this is an invasion of privacy, or have never asked these questions before, or are wondering if you shouldn’t already know this information. If we’re having those thoughts, then the actions we take will not be favorable.”

Troxell recommends building a client profile, “so you know the psychographic profile.”

She recommended producing a series of webinars, blog posts and various forms of communication on the topic of health to create multiple touch points.

“Set a stage that will allow you to engage in less of a threatening way to both you and the client,” Troxell said. “And just like you would in a planning conversation, invite the entire family because it’s going to impact everyone.”

Conference participants, all 40 Under 40 honorees from 2014 through 2020, concluded that the industry's top challenges looking ahead to the next few years focus on providing a top-notch client experience and reacting to changes caused by COVID-19.

Many agreed providing quality client service going forward will need to include additional elements like life coaching, therapy, help with family dynamics, and even travel assistance.

The pandemic has spurred many changes for advisers that are not going to disappear with the virus, such as the move to virtual meetings with clients, advice teams working remotely, focusing services for a particular type of client rather than a group based on geography, and getting to know clients even more personally.