The Evolution of Goals Based Advice

This article originally appeared in the IFA.

Scaled advice is evolving to make comprehensive goals-based advice more intuitive, relevant and easier to deliver. It’s a journey aimed at reducing the complexities and silos of traditional scaled advice and creating a simple and efficient way to provide a goals-based strategy in real-time.

For advisers who want to scale their client base, reducing the up-front cost to deliver advice and bringing results to the forefront of the conversation are both useful strategies.

Earlier this year, Midwinter analysed the big data generated through its financial planning software AdviceOS, drawing out data and insights to drive product improvements.

Two key findings were:

  1. On average, clients have about 3 financial goals that they are trying to reach;
  2. An adviser will typically run an SOA twice before presenting it to their client.

Goals-based advice helps ensure that advisers are focused on the financial and lifestyle goals relevant to your client. What’s evident from this data is that any discussion of goals-based advice needs to take into account multiple goals.

Clients are not looking to achieve a single objective in isolation. Clients are looking to achieve multiple goals, and the timing and trade-offs around these are a vital part of the discussion.  

Advisers are also under increasing pressure to cut costs and demonstrate that they are providing value. Creating multiple SOAs is time consuming for advisers and impacts how quickly they can provide demonstrable value to their client.

Real-time multi-goal advice 

Midwinter’s new MultiGoal advice module enables advisers to provide value in their very first meeting with a client. With MultiGoal, an adviser can discuss a client’s objectives and develop a comprehensive goal map in a single meeting. 

MultiGoal takes into account a client’s financial situation and provides a clear view of how realistic their financial objectives are based on the client’s preferred timing and priorities. This makes it easy for an adviser to have a meaningful discussion about their options and trade-offs while updating the goal map in real-time.

Typically, advisers will speak to or meet with a new client several times before they provide a chargeable outcome. With MultiGoal, the adviser can create an SOA after the first meeting. By providing advice more quickly, an adviser increases their efficiency so they can cut cost while also reducing hassle for their client.

Making advice accessible and improving financial literacy

Reducing the overhead and cost to provide advice is an opportunity to make financial advice more accessible to a greater number of Australians.

By offering a clear and simple way to discuss financial goals and the trade-offs between different objectives, advisers can also improve the financial literacy of their clients.

This is a win-win for an adviser and their client.

As the client becomes better informed about their financial situation, this will help build trust with their adviser and open opportunity for an adviser to provides additional services and product advice.

For more information on MultiGoal and AdviceOS by Midwinter, click here

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