AI chatbots are reportedly taking over the financial advisor role, but good luck with it, advisors say.
Financial advisors are no longer just providing help on investing and building your future. Financial advisors now act as friends, confidants, and sometimes even daily assistants to help clients manage their lives and reduce their stress. They work to help customers live their best lives now and in the future.
Various services to meet the diverse needs of clients include: Ideas to minimize taxes during and after your lifetime; Making referrals to and working with estate planning attorneys to create wills and trusts for children and grandchildren; Suggesting trust companies that can offer medical and financial power of attorney to childless individuals and couples; Ability to act as executor and trustee of the estate; And sometimes, provide caregiving guidance as well as budgeting and spending tips.
“Going back 25 years, the business was transactional — primarily investment or insurance transactions, to help clients cope with the pressures of caring for aging parents, disabled children and other complex health issues,” said Brian Leitner, managing director of wealth solutions at national financial services firm Mariner. “Now, it’s holistic.”
Why is the role of the financial advisor expanding?
They say financial advisors are uniquely positioned to help clients deal with major life changes. Advisors know their clients’ fears, dreams and hopes for themselves and those around them, their relationships and what is most important to them because they are the ones who help them finance and realize their goals.
It’s a far cry from the role it played decades ago when Mike McCracken, president and founder of Wealth Guide Financial, was 14 years old and learning to invest. “I used my father’s broker and would buy stocks,” he said. “He didn’t even once ask what were you saving for and why? So, he put me into the stock I was interested in, but if I wanted to buy a bike the next week, that would have been a terrible thing to do” because McCracken’s money would have been tied up in the stock.
“As I became more involved in my practice, I started wearing a dual hat,” McCracken said. “As a fiduciary, I’m doing what’s best for my client, not just what’s expedient, so I need to know if this is what’s best? If I give advice, it affects the rest of their life.”
Nowadays, financial advisors ask tough questions, and dig deeper to make sure your needs and wants are appropriately met.
“Financial planning often sits at the intersection of health, family relationships and major life decisions,” Leitner said.
What can financial advisors help with?
In addition to how to invest the money, advisors can often provide tips on taxes, charitable giving, and trust and estate planning, even if they are not able to prepare the legal documents themselves. For that you will need a lawyer.
Some advisors also serve as everyday consultants who can help you budget and figure out how to buy almost anything. “Helping buy a car is nothing new for us,” Leitner said. “Whenever there is a financial transaction, we want to know.”
McCracken said he regularly gets calls about how to pay off a truck or buy a second home. He said he would examine a client’s finances, consider their desired lifestyle and goals, analyze the numbers and find ways to help his clients achieve what they want and when they want it.
“Financial stuff? You’re welcome to call me any time,” he said.
Mariner takes service a step further into the personal realm by helping untangle the complexities of health care and long-term care. Mariner recently announced a partnership with Cariloop, a care assistance platform that provides people with professional coaching, care tools, and a verified network of providers to help families with aging parents, children with disabilities, and other complex care scenarios.
It may seem odd for a financial advice firm to offer caregiving assistance, but more than 63 million Americans (about one in four adults) are caregivers, and nearly one in three supports both a parent and child, AARP said.
Related decisions directly impact retirement planning, estate planning and long-term financial security. So, more clients are turning to financial advisors for guidance in these stressful moments, said Leitner, whose own “dad is not in good health and my mom is the caregiver.”
“Adoption rates have exceeded expectations and the testimonials bring tears to your eyes,” he said. “We’ve become vulnerable, and everything that’s going on in our lives individually — kids with special needs, moms and dads — is going to cause stress.”
With Cariloop, Mariner’s employees and customers can find support. Cariloop takes out some of the burden, like researching companies that accept your insurance, finding vetted caregivers, calling Medicare or long-term care insurance companies on your behalf, or finding the right personalized education program for a disabled dependent and training you.
“Today’s advisors come to the forefront for clients in the moments that matter most,” said Marty Bicknell, chief executive and president of Mariner.
Medora Lee is the money, markets and personal finance reporter at USA TODAY.