Advisors are required—either by regulation or as a matter of policy—to complete a Financial Needs Analysis (FNA) before making a sale to a client. But the best advisors understand that, if they stretch their thinking beyond just following the rulebook and harness the true power of FNAs, they will uncover opportunities that will significantly grow their practices.
Used correctly, as part of a dynamic client relationship management system, FNAs can become a significant revenue multiplier.
Multiplier #1: FNAs can redefine your advisor’s objectives #
When your advisors first meet with a prospect what is their goal? Are they trying to make a sale or is their goal to develop a relationship? The former represents a “sales” mentality and, even if it is achieved, has a limited, one-time benefit.
There is far more value, to both clients and advisors, in establishing a long-term relationship which uncovers and meets client needs as they arise. FNAs are the cornerstone of an advisor’s approach to both client development and building sustainable long-term revenue in their practice.
Uncovering and meeting an array of needs is an on-going, client-centric journey for your advisors. In the old advisor world, FNAs were usually unstructured, ad hoc conversations with clients. “Back of the envelope” conversations where advisors relied heavily on their “people skills” to tease out each client’s needs. The results were predictably hit and miss.
The big development for life insurance leaders is that you can provide your teams with digital, advisor-specific tools that can reduce, or even replace, those legacy ad hoc processes. Such solutions enable advisors to conduct powerful FNAs that form the basis of repeatable and effective systems for clarifying and capturing every clients’ journey.
Using an advisor-specific FNA software solution enables advisors to always get all the information they need to best help their client. And the client, because they can review and revise their own information as part of the process, they become much more engaged at an earlier stage—making them more thoughtful about their goals and dreams and more receptive to good advice.
Multiplier #2: FNAs build the lifetime value of a client #
We all know most people don’t buy from an advisor because of price or product features. Advisors who rely on the logic of their solution, and features of their great products, are ignoring the truth that there is not as much difference between products as there is between advisors. The client’s decision to buy often rests in large part on the advisor’s experience and ability to create an honest emotional connection.
The point of an FNA is not to uncover needs—it’s to build trust #
The process of working through an FNA puts the focus squarely on the client. It shows them that the advisor is motivated by the client’s agenda rather than their own. By providing the right kind of FNA solution that can integrate with other advisor-specific client relationship management tools, you enable your advisors to not only analyze a client’s current situation but also to create a dialogue around the future they hope for. This combination of advisor capability and targeted technology builds understanding and ultimately is instrumental in creating the trust which is the foundation of strong relationships.
Multiplier #3: FNAs create barriers against your advisor’s competition #
FNAs uncover multiple needs. Repeat FNAs, conducted as part of an annual client review process, reveal how needs change and evolve over time, and provide new opportunities to support client needs.
In effect, a regular review process, powered by a digital FNA tool, is a long-term reliable cross-selling system. Not only does this create predictable revenue growth for your advisors, it creates a depth of knowledge about a client, and connection with them, that is hard to undo. Providing your advisors with the tools and support to work through these types of processes is a way of giving them a sort of immunity against other advisors trying to lure away valuable clients.
Good FNA software supports an advisor’s relationship building efforts and includes tools for analyzing a client’s life, disability, and critical illness insurance needs along with great calculators for determining retirement savings and income needs, education savings needs, and investment goals. Meeting many, if not all, of these needs over time creates hooks that bind advisors and clients together.
Wrap up #
Conducting a comprehensive FNA for each client—whether it is required by law or not— sets your advisors apart from their competition. It builds deeper, longer lasting and more valuable relationships with clients. And it makes them less likely to consider working with anyone else.
The best advisors have re-thought their approach to client-building, and their attitudes towards FNAs. No longer are these tools merely compliance instruments—they are becoming the foundational pieces of the strategies and processes that top advisors implement in order to radically alter the growth trajectories of their practices.
Providing your advisors with the right digital tools supports them in their transformation into client-centric experience builders, and delivers the best possible outcomes for your organization, the advisors and their clients.
