4 ways to help clients achieve positive financial outcomes

Financial stress is one of the biggest concerns Americans focus on in their daily lives. At least 79% of working Americans reported serious concerns in their lives based around their finances, while the remaining 21% say they are confident planners about their current behavior and future prospects, according to a new study by The Guardian Life Insurance Company of America.

Matthew Bryan, assistant vice president at Guardian, says that they looked behaviors rather than demographics to ascertain emotional and financial confidence of Americans.

“We learned it’s not solely your income that determines confidence, but rather your attitudes and behaviors that are the deciding factors,” Bryan says. “By mimicking the behaviors of the most confident Americans, you may be able to achieve more positive life and financial outcomes.”

After studying the 21% of surveyors who said they are confident financial planners, Guardian concluded that there are four model behaviors that these candidates exhibited that can be taught by advisers to the other 79% to improve financial confidence. These behaviors are planning, education, ownership and strategic relationships.

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Even among clients who have a written financial plan, many lack core elements necessary for a confident plan. Nearly two-thirds of Americans do not describe themselves as being good at living within their means, according to Guardian’s study of financial and emotional confidence.

Only half of workers with a financial plan say their plan includes clearly stated financial objectives. Proper planning can help individuals get on track financially now, and in the future. Having a written plan and reviewing it annually can be a sound strategy. According to Guardian, the confident planner segments his or her plan by:

  • Staying within their means
  • Remaining focused on the long-term rather than the short-term
  • Having attainable goals within the long-term plan

For the average working class American, financial literacy is not as high as it should be. There is a correlation between lack of financial literacy and financial product understanding. By answering and asking the right questions, actively and increasing individual knowledge, behaviors and priorities will begin to align.
Only a third or fewer of workers assert a solid understanding of many common financial products. A confident fiscal planner, Guardian says, shows an above-average understanding of things such as:

  • Financial products like investments, all types of insurance and annuities
  • Knowing how much money they will need in retirement to cover expenses apart from healthcare
  • Concepts such as budgeting, risk tolerance and asset allocation

“The happiest and least-stressed Americans are the most financially literate, are more likely to have a detailed plan, and own appropriate products to financially protect their families,” Bryan says. “Advisers can help by taking a holistic approach that identifies the gaps in their clients’ current behaviors and then laying out a blueprint to address those gaps for a more financially confident future that models the behaviors of the most confident Americans.”

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Product ownership is not as high as it should be, as indicated by top life and financial priorities. Solution-oriented ownership of both protection and investing products is part of a well-thought-out wealth management plan for the future.
In order to increase confidence, advisers need to inform clients to own diverse and appropriate products, Guardian says. These products can include:

  • Mutual funds, individual stocks and bonds
  • Annuities
  • Various types of life, disability and business insurance

Strategic relationship
Working Americans want retirement income and savings tips. Having a sound financial advice and tools to leverage can help clients move into a better level of fiscal confidence. These income strategies and savings tips are by far the most important areas for which works look to advisers.

The average percentage of Americans who work with a financial adviser is 47%, versus 64% who do not. Having a go-to resource to rely on is a major factor in having financial confidence. With sound strategic relationships, clients will be more likely to:

  • Have a strategic relationship with an adviser that they trust to be their financial coach
  • Rely on their adviser for strategies to generate retirement income
  • Create a holistic financial plan with their adviser
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