60% Higher Plan Adoption via Goals-Based Planning Intake

60% Higher Plan Adoption via Goals-Based Planning Intake

Executive Summary

Richardson & Associates, a leading RIA firm, struggled with low financial plan adoption rates, leaving significant client value unrealized. Golden Door Asset partnered with them to redesign their client onboarding process, shifting the focus to goals-based planning and incorporating interactive tools. This approach emphasized client values and priorities, leading to a remarkable 60% increase in financial plan adoption within the first quarter of implementation, demonstrating a stronger client commitment and enhanced financial well-being.

The Challenge

Richardson & Associates, managing over $500 million in assets for high-net-worth individuals and families, recognized a critical bottleneck in their service delivery. While their financial plans were meticulously crafted and comprehensive, a significant portion of their clients were hesitant to fully engage with them. This resulted in low adoption rates, meaning clients weren’t actively utilizing or adhering to the recommendations within their plans.

Specifically, before implementing the new approach, only 40% of new clients fully adopted their financial plans within the first six months. This meant that out of every 10 new clients, only 4 were actively making the recommended changes to their portfolios, adjusting their savings strategies, or implementing tax optimization strategies. The remaining 6 clients, while receiving the plan, weren’t fully capitalizing on its potential benefits.

This lack of engagement translated into several challenges for Richardson & Associates. First, it limited the firm's ability to deliver optimal financial outcomes for their clients. For example, a client with $1 million in investable assets, who failed to rebalance their portfolio according to the plan's recommendations, could potentially miss out on an additional 1-2% in annual returns, equating to $10,000 to $20,000 in lost growth opportunities each year.

Second, low adoption rates hindered the firm's ability to showcase the full value of their services. Clients who didn't fully engage with the plan were less likely to appreciate the depth and breadth of the advice provided, potentially impacting client retention and referrals.

Third, the firm's advisors spent considerable time and effort creating detailed financial plans, only to see a significant portion of them go underutilized. This created inefficiencies within the practice and reduced advisor morale. The team estimated that each advisor spent an average of 15 hours per new client developing a comprehensive plan, with a significant portion of that time effectively wasted due to low adoption. Furthermore, the firm suspected that the clients who didn't adopt the plan were less likely to stay with the firm long term, potentially costing the firm hundreds of thousands of dollars in lost revenue each year. They needed a better solution.

The Approach

Richardson & Associates, in collaboration with Golden Door Asset, adopted a strategic approach focused on shifting the emphasis from traditional financial planning to goals-based planning during the initial client onboarding phase. This involved a fundamental change in how they interacted with new clients and the tools they used.

The first key step was to move away from a purely data-driven approach to a more holistic and personalized conversation. Instead of immediately diving into asset allocation and investment strategies, advisors began by engaging clients in a deep exploration of their life goals, values, and priorities. This included asking open-ended questions about their aspirations for retirement, their children's education, philanthropic interests, and other meaningful life events.

To facilitate this process, Richardson & Associates implemented MoneyGuidePro, a leading financial planning software, to aid in setting financial goals and assessing risk tolerance. This tool allowed advisors to visually represent the potential impact of different financial decisions on the client's ability to achieve their goals. The software also included a robust risk assessment questionnaire, ensuring that the portfolio allocation aligned with the client's comfort level.

The second crucial component was the creation of custom questionnaires within their CRM system. These questionnaires were designed to capture client values and priorities in a more structured and systematic way. Questions focused on topics such as their desired lifestyle during retirement, their willingness to take risks, and the importance they placed on leaving a legacy for their families.

These data points were then integrated into the financial planning process, ensuring that the recommendations were not only financially sound but also aligned with the client's deeply held values. The goal was to create a financial plan that resonated with the client on a personal level, making them more likely to embrace it and actively participate in its implementation.

Furthermore, Richardson & Associates trained their advisors on effective communication techniques to facilitate these goals-based conversations. They emphasized the importance of active listening, empathy, and the ability to translate complex financial concepts into easy-to-understand language. Advisors were also encouraged to share their own personal stories and experiences to build rapport with clients and create a sense of trust.

This client-centric approach aimed to empower clients to take ownership of their financial future and actively participate in the planning process. By understanding the "why" behind the plan, clients were more likely to embrace the recommendations and make the necessary changes to achieve their goals.

Technical Implementation

The technical implementation of the goals-based planning intake process involved several key integrations and customizations within Richardson & Associates' existing technology infrastructure.

• MoneyGuidePro Integration: MoneyGuidePro was integrated with the firm's CRM system using API connections. This allowed for seamless data transfer between the two platforms, eliminating the need for manual data entry and reducing the risk of errors. Client goals and risk tolerance assessments completed in MoneyGuidePro were automatically populated into the CRM system, providing advisors with a comprehensive view of the client's financial situation.

• Custom CRM Questionnaires: Custom questionnaires were built within the CRM platform using a drag-and-drop interface. These questionnaires were designed to capture client values and priorities in a structured and systematic way. The questions were carefully crafted to elicit meaningful insights into the client's motivations, aspirations, and concerns. The data collected from these questionnaires was then used to personalize the financial planning process and tailor the recommendations to the client's specific needs. The CRM stored all answers as discrete data points for analytics reporting.

• Risk Tolerance Calculation: Risk tolerance was assessed using a combination of MoneyGuidePro's proprietary risk assessment questionnaire and a behavioral finance questionnaire developed by Golden Door Asset. The behavioral finance questionnaire was designed to identify cognitive biases and emotional factors that could influence the client's investment decisions. The results from both questionnaires were combined to generate a risk score, which was then used to determine the appropriate asset allocation for the client's portfolio. Risk scoring combined quantitative elements from investment performance, and qualitative elements of tolerance for loss.

• Goal Prioritization Algorithm: A custom algorithm was developed to prioritize client goals based on their importance, urgency, and feasibility. This algorithm considered factors such as the client's age, income, assets, and time horizon. The algorithm was designed to identify the goals that were most critical to the client's financial well-being and ensure that they were given the highest priority in the financial plan. This algorithm also allowed for sensitivity analysis to determine how different investment scenarios might affect the achievability of various goals.

• Data Security & Compliance: All data collected during the onboarding process was stored securely in accordance with industry best practices and regulatory requirements. Data encryption and access controls were implemented to protect client information from unauthorized access. The firm also conducted regular security audits to ensure the integrity of its data systems.

Results & ROI

The implementation of the goals-based planning intake process yielded significant and measurable results for Richardson & Associates.

• Financial Plan Adoption Rate: The most significant outcome was a 60% increase in financial plan adoption rates within the first quarter of implementation. Before the change, the adoption rate was at 40%. Now, 64% of new clients are actively engaged with their financial plans within the first six months, demonstrating a stronger commitment to achieving their financial goals.
• Client Satisfaction: Client satisfaction scores, as measured by post-onboarding surveys, increased by 25%. Clients reported feeling more understood, valued, and confident in the firm's ability to help them achieve their financial aspirations. The Net Promoter Score (NPS) increased from 50 to 70, indicating a substantial increase in client advocacy and willingness to recommend the firm to others.
• Advisor Efficiency: While the initial onboarding process took slightly longer (an average of 2 additional hours per client), advisors reported that they spent less time on follow-up and revisions because clients were more engaged and proactive. This resulted in an overall increase in advisor efficiency, allowing them to serve more clients and generate more revenue. Advisor satisfaction also increased, because advisors felt more connected to their clients.
• Assets Under Management (AUM) Growth: The increased client engagement and satisfaction led to a noticeable increase in AUM growth. The firm experienced a 15% increase in AUM in the first year following the implementation of the new onboarding process, driven by increased client retention, referrals, and new client acquisitions. This 15% AUM growth equated to over $75 million, increasing the firm's yearly revenue.
• Reduced Client Churn: Client churn decreased by 30%, indicating that clients were more likely to stay with the firm after experiencing the personalized and engaging onboarding process. This reduced churn resulted in significant cost savings for the firm, as it cost less to retain existing clients than to acquire new ones.

Key Takeaways

For other advisors considering implementing a goals-based planning approach, consider these key takeaways:

1. Prioritize the "Why" over the "How": Focus on understanding your clients' life goals and values before diving into the technical details of financial planning. This creates a deeper connection and fosters greater client engagement.
2. Leverage Technology to Personalize the Experience: Utilize financial planning software and CRM systems to capture client data, personalize recommendations, and track progress toward their goals.
3. Invest in Advisor Training: Equip your advisors with the communication skills and tools they need to effectively facilitate goals-based conversations and build strong client relationships.
4. Measure and Track Results: Monitor key metrics such as client adoption rates, satisfaction scores, and AUM growth to assess the effectiveness of your goals-based planning approach and make necessary adjustments.
5. Make the Process Interactive: Allow clients to actively participate in the plan's construction, even if it requires sacrificing perceived efficiencies. The increased "skin in the game" will raise adoption rates.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors enhance client engagement, personalize investment strategies, and streamline their practice management. Visit our tools to see how we can help your practice.