Some advisers are playing up an extra role as their clients' "life coach," since investment skills alone may no longer be enough to stand out in a field now replete with computer-generated advice.
Advisers are often in a unique position to provide personal coaching to clients apart from money issues. Although advisers cannot solve serious problems, they can use their networks to help clients find experts for everything from substance abuse treatment to cancer support.
They can also nudge clients in a better direction during some of life's rough patches, like career changes.
Karen Higgins, an adviser with Wells Fargo Advisors in Richmond, Va., stepped into such a role when a recently divorced client lost her desire to socialize. Higgins asked her every week to join her at a local women’s club meeting. The client finally agreed, leading to a better overall social life.
Life-coaching is a natural fit for advisers, since money underpins much of life, and because the relationship between financial adviser and client can be so intimate, Higgins said.
To be sure, some clients will always go to friends, rabbis, or doctors for personal advice and will consult financial advisers strictly for cost-effective returns. But being aware of opportunities to provide extra help may set advisers apart in a field that is now facing more competition from automated investment services that use algorithms to manage portfolios.
This month, Charles Schwab Corp became the latest firm to launch such a service, promoting it as being free of advisory fees and commissions.
Matt Lynch, managing principal of Strategy & Resources, LLC, a financial services consulting firm in Dayton, Ohio, said it is a good time for advisers to highlight their caring sides.
Investments and financial planning can be automated, he said. “But the ability to show empathy, and to give clients confidence to stay invested and make good decisions, that’s more of an art than a science.”
Financial planners say life-coaching skills have deepened relationships and generated referrals.
Bill Keen, founder of Keen Wealth Advisors in Overland Park, Kansas enjoys those “ripple effects” after going “way beyond the money, way beyond the financial side of things” for clients.
Keen looks back on guiding a suddenly-widowed client through a severe depression as his most rewarding life-coaching experience. He helped her get professional counseling, sell her home, and find a retirement community near her children.
Even when the issue isn't serious, careful listening can help an adviser halt unrealistic expectations, and potentially disastrous overspending, said Jacob Gold, who heads Jacob Gold and Associates in Scottsdale, Arizona.
Gold gently recalibrates expectations when a client talks about out-of-reach retirement plans, such as buying a beach home. But he also works to understand the client's underlying need, to see if it might be met more fittingly.
In a world of increased adviser competition, sympathy and insight are keys to staying valued, Gold added. “It’s no longer an environment of what stock we should get into when, and when to get out,” he said.
(Reporting by Hilary Johnson; Editing by Suzanne Barlyn and Christian Plumb)