What Americans want from a modern-day financial advisor

Six-in-ten Americans say their financial planning needs improvement , and one-third say they are proactively seeking out the help of a financial advisor – and for good reason. According to new research released by Northwestern Mutual this week , Americans with an advisor exhibit more certainty in the stability of their housing situation, their ability to manage debt, their understanding of personal finances, their ability to afford healthcare, the stability of their employment, and their certainty in life in general.

As more Americans choose to seek financial advice, now’s the perfect time to raise this question: “What is required to be an exceptional, trustworthy modern-day financial advisor?” To me, three characteristics are key:

Conviction To Comprehensive Planning

Clients want to work with an advisor who puts the client's needs first. In the most basic sense, planning orients the discussion around the client’s goals whereas a “product” or “solution” discussion is focused on what the advisor is bringing to the table. This orientation makes a big difference in building trust early in the relationship.

It also is important that plans are both personal and comprehensive. We know from the math that a comprehensive financial plan that elegantly blends investments, annuities, and permanent life insurance is proven to deliver better financial outcomes for clients in retirement more often .

But this isn’t just a math equation. It’s also personal.?A truly comprehensive plan includes risk management that protects what matters most and provides peace of mind. Relevant and trusted advisors listen to their prospective clients’ goals and fears, first – because it’s not about selling financial products, it’s about helping people address their financial anxieties and achieve their goals. After that thorough conversation, successful advisors will custom-build each individual and family a comprehensive plan that's designed to protect what matters most while also helping create future prosperity. That kind of context-rich experience helps clients understand how risk management and wealth management strategies complement each other – enabling them to worry less and live more.

Today, many Americans believe that they can invest their way to financial security, but too often, that approach is incomplete.

Few people know this better than Boulder, Colorado-based Northwestern Mutual Managing Director and Wealth Management Advisor Ryan Yoder .

Recently, Ryan told me about the first time one of his clients passed away unexpectedly when Ryan was 24 years old and brand new in the business. The client, one of Ryan’s closest friends, was tragically killed in a car accident. The client’s widow was injured but survived the accident along with their three young children. During their planning meetings, Ryan had strongly recommended a comprehensive financial plan with investments, life insurance and a strategy to address a disability event, but the client didn’t follow Ryan’s advice. He chose to start first with increasing monthly retirement savings, thereby relying solely on a modest group insurance benefit for risk protection.

For Ryan, that was the defining moment of his career. It forever changed the way he works with clients – and his unshakeable conviction and approach to planning ensure that his clients will be protected from life’s challenges. Ryan’s conviction to comprehensive planning has gone on to impact countless others, including the clients he serves and the advisors that he trains and mentors as one of Northwestern Mutual’s leading Managing Directors.?

Courage

Clients need their advisors to be bold and brave. They need a partner to ask them tough questions and help them stay on course. Rather than avoiding tough questions or sensitive topics, courageous advisors dive right in. Getting uncomfortable with clients isn’t easy AND it builds trust. Clients implicitly know that the advisor is willing to take risks for them because they are focusing on what is right for the client and not their own comfort or convenience.

There’s another way courageous advisors are building trust in the marketplace. To help more Americans build financial security, advisors are venturing outside of their comfort zones to connect with a more diverse set of clients. As we seek to expand our relevance and reach as an industry, this is a prime example of something ventured and something gained. Advisors with the courage to venture into new markets will gain by expanding their perspectives and their impact.???

Connection

While there are many different business and affiliation models, all advisors face the critical questions of whom are they partnering with and for what? Advisors make promises every day in the marketplace, and their choice of partners play an important role in whether and how those promises are kept.

That’s why everyone at Northwestern Mutual works so hard to ensure our company offers everything a financial advisor needs to truly thrive and to make sure that those promises are kept: exceptional financial strength , an industry-leading $6.5 billion dividend payout in 2022, and a mutual ownership structure that ensures everything we do is focused on the best interests of our clients and policyowners. Our strategy is also laser focused on providing unmatched client and advisor experiences. Even when faced with a worldwide pandemic – we’ve continued to invest heavily in our client experience to deliver always-on connected service and a dynamic digital experience. In doing so, we ensure that our advisors have access to the gold standard of planning, products and performance.

To all who have chosen financial advice as their profession, I want to say, “Thank you.” This is one of the noblest fields that anyone can enter. In a world that’s often transactional, seasoned and effective financial advisors are making a positive, deep and meaningful impact in the lives of millions of people. But as our industry and our world continues to change, I believe that clients will gravitate toward financial advisors with these characteristics who excel at earning trust.

What else do you think is required to win people’s trust and thrive in financial advice? Let me know.?

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Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM) and its subsidiaries in Milwaukee, WI.?

Northwestern Mutual continues to have the highest financial strength ratings awarded to any U.S. life insurer by all four of the major rating agencies: A.M. Best Company,

A++ (highest), June 2022; Fitch Ratings, AAA (highest), July 2022; Moody’s Investors Service, Aaa (highest), May 2022; S&P Global Ratings, AA+ (second highest), July 2022. Third-party ratings are subject to change and are a measure of the company’s relative financial strength and security but are not a reflection of the performance or stability of funds invested in a company’s separate accounts. Ratings are for The Northwestern Mutual Life Insurance Company and Northwestern Long Term Care Insurance Company.

The dividend scale and the underlying dividend interest rates are reviewed annually and are subject to change.?Future dividends are not guaranteed, although Northwestern Mutual has paid a dividend every year since 1872.

Not all Northwestern Mutual representatives are advisors. Only those representatives with “Advisor” in their title or who otherwise disclose their status as an advisor of Northwestern Mutual Wealth Management Company (NMWMC) are credentialed as NMWMC representatives to provide advisory services.