How Advisors Can Help Build Clients' Confidence

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Carissa Lucreziano, CFP

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Text transcript

Carissa Lucreziano vice-president of Financial and Investment Advice with CIBC.

Here are some thoughts on how advisors can support their clients in building financial wellbeing and overall financial confidence. Allocate time in the meeting for financial education. Ask your clients in advance what they would like more information on or what they’re interested in learning more about. You can ask them to send questions as part of the agenda process in advance. This will give you the opportunity to prepare the tools and references to help build that trust and confidence.

Get back to basics. Don’t underestimate the importance of sharing tips and tools around budgeting and the future value opportunity of investing. Keep in mind that while these are topics of conversations about every day, your meeting with an individual client might be one of the few times throughout the year that they really talk about this, or they really get and go a little deep. So, reminders and tips, tools and good money management practices can make the world of difference. Encourage clients and help them get comfortable adopting digital tools to manage their overall finances.

A way to help Canadians feel more in control of their finances is to provide them with planning tools. Many Canadians may not be aware of all the financial tools and support available online. There’s many of them to help them plan and achieve their goals, whether it’s budgeting for renovation or investing in a child’s education, or simply getting tips on paying down debt. Clients have access to interactive tools to help them reach their goals.

And lastly put the plan in motion. A plan is great, but it’s the results that make a difference for our clients. A financial plan is a valuable tool that helps clients visualize their goals in the future. And a means to consistently measure progress and adjust along the way. It’s also important to look for opportunities to break up a long term ambition into smaller goals or chunks that are more achievable and measurable, adjusting the size and scope of goals so clients can prioritize. This can help clients see the possibilities that are within reach for their future and help motivate them to stick to their plan. When clients see real progress towards their goals, it helps build trust in the advice that you provide them.

Throughout the pandemic we saw many Canadians delay their dreams and ambitions out of necessity. But as people look forward, we’re beginning to see bigger dreams return as priorities again. While the pandemic has changed the world in many ways, 73% of Canadians say that their goals are much the same as before. The goals and ambitions for Canadians are, and in order of top five, traveling, traveling abroad or locally within Canada. Eliminating debt is also a very big ambition for Canadians and making positive lifestyle changes. In addition, getting back on track after the pandemic, that means many different things to many different people and savings in general and savings for retirement, that longer term view.

So those would be the top five ambitions of Canadians today. About 42% surveyed say that they had to put their larger ambitions on hold during the pandemic. And the majority are now refocused on smaller, more practical ambitions and goals. The most common challenges standing between Canadians and their goals is money, either not having enough or not managing finances correctly. Time constraints are also an issue. Not putting time aside to really focus on financial management and planning for the future. Feelings of not knowing where to start is also a big challenge and the feeling of being overwhelmed and overall financial confidence.

Only 25% say that they seek advice and help from professionals or family and network. So there’s so much on the minds of Canadians today, advisors can really proactively ask clients about what lifestyle changes they’ve had, especially in the last 20 months or so. Changes to goals. What is important to them now that they may have reconsidered or reflected on.

Clients may also not be aware of how certain lifestyle changes, whether over the pandemic or over the last five, 10 years could really affect financial strategies. So they may not think to share that with their advisor. It’s also good to prepare clients for things that may happen on their life journey. Asking clients about their goals can really tell you a lot about that person and help you uncover opportunities to help them fulfill them. Canadians with financial plans feel that they are saving more. They feel they are living well and experiencing high levels of contentment in their lives. More than 80% of those with comprehensive financial plans say that they feel on track with their financial affairs versus 44% without plans. Financial advisors really help in building wealth. Investors who work with advisors for 15 years or more will accumulate 3.9 times more in savings than compared to investors without that advice.

Also advised investors report higher levels of satisfaction and trust in their advisors. Nearly 95% of investors trust their advisors to give them sound advice. And life is complex. Investors need more holistic and thoughtful advice than ever before. Advisors provide great value in helping clients deal with financial implications of major life events, such as illness, divorce. They can also help investors understand trade offs when pursuing multiple and competing financial goals. Articulating your value as an advisor is also very important, your role and the benefits of working as a professional advisor, how you are compensated and the extension of your support through other professionals in your network is key.