Wellbeing is a hot topic in the media is fast rising up the agenda for financial planners. Why is this?

    If you think back only a few years, the subject of client wellbeing would never have been on the agenda at any financial services industry event or in the financial media.

    Yet its importance is now being increasingly recognised. There are countless articles in illuminate on the subject, for one.

    A while back I read an interview with Meir Stateman, Professor of Finance at Santa Clara University, and author of ‘Finance for normal people: how investors and markets behave’. He said:

    “The 'main job' of an advisor is to manage a client’s wellbeing. You want to maximize clients’ wealth, of course; but eventually wealth is just a way station to well-being. As an advisor, you have to be concerned about people’s wellbeing and listen very carefully to them.”

    So, what is going on? Why is client wellbeing rising up the agenda so fast?

    The meaning of wealth

    The way we use the word ‘wealth’ nowadays tends to be in a financial sense. Hence many financial advisory firms call themselves ‘wealth managers’. Yet as I learned from financial planner Paul Tracey, the origins of the word ‘wealth’ has a much broader meaning. To quote from the earthbound report on the origins of the word:

    ‘Wealth’ comes from the old English ‘weal’, which means ‘wealth, welfare, and wellbeing’. Weal is in turn related to the older word ‘wel’, meaning ‘in a state of good fortune, welfare, or happiness’.

    To live a truly wealthy life it is more than just about the money

    A highly significant shift is happening in society right now. There's a rapidly growing number of people who are realising that materialism does not bring you happiness, contentment, and feelings of well-being. Covid and the consequent working from home has accelerated this for many people.

    People want a high quality of life now and not just to exist on the hamster wheel of life waiting for a better tomorrow. Equally, there are a lot of people out there who have financial wealth and yet they are still unhappy.

    So, what is the point of providing rock solid, technically brilliant financial advice if clients are no happier?   

    A big shortcoming of the financial advice business has been to focus only upon client’s money and not their wellbeing.

    This is changing and for a face-to-face financial advice proposition to thrive and be profitable, it will need to bring more to the table than simply providing financial products.

    Focusing upon your client’s wellbeing is how to create and add more value

    Clients will measure the value they get from their adviser not through the products they buy but from how their quality of life is improving. For example:

    *Are their financial decisions aligned with their core values?

    *How happy are they with their quality of life right now?

    *Is worry, anxiety, and stress about money being eliminated and replaced with peace of mind?

    *Do they feel confident about the future and what it holds for them?

    The skill set of advisers is shifting

    The qualification process, the regulator, and many advisory businesses are still focusing on technical ability.

    While this is important, excellent people skills will be an even bigger factor in an advisers success. The ability to connect with clients more deeply, understand them, coach them, and craft advice to help them experience greater wellbeing will help you thrive in a rapidly changing business environment.

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