This article provides tools to help financial planning professionals help their clients make the best wedding and related event decisions.
The financial advising business has been evolving.
The technical side of financial advising is important. Understanding the breadth of financial products available to support a client is no mean feat. There was a time when financial advisors were also part of the financial product creation process. Like managing a fund or balancing a portfolio. While many of the blocking and tackling financial activities have been replaced by computers and AI, understanding what financial products are available and how they relate is a bigger priority.
Compliance and risk management for financial advisors have increased, especially since the 2008-09 financial crisis. Today, financial services firms are expected to have controls, that among other things, keep financial advisors from selling an inappropriate financial product to a client.
The psychological side of financial advising has dramatically increased in its relevance and understanding. Today, our knowledge of the brain and how emotions impact financial decision-making has increased dramatically. The time value of money is notoriously difficult for our emotions to integrate into financial decisions. A large sell-off or bump in the road may create client fear. Also, multiple stakeholders, like members of a client's family, may have different judgments that need to be integrated.
About the author: Jeff Hulett is a career banker, data scientist, behavioral economist, and choice architect. Jeff has held banking and consulting leadership roles at Wells Fargo, Citibank, KPMG, and IBM. Today, Jeff is an executive with the Definitive Companies. He teaches personal finance at James Madison University and provides personal finance seminars. Check out his new book -- Making Choices, Making Money: Your Guide to Making Confident Financial Decisions -- at jeffhulett.com.
I have many friends and professional acquaintances who are financial planners. These are people licensed to provide financial advice to their clients. Often, these financial planners cater to wealthier people and their family members.
I asked the financial planners:
“What is the most difficult financial advice you provide your clients and why?”
Near the top of the list is consistently:
“Their children’s wedding or similar kinds of events.”
Why is this challenging for a financial planner?
“Emotion and family dynamics. Clients find it challenging to separate their emotions from their objective decision criteria. Weddings are often the most emotionally charged decisions they make.”
I ask if the financial planners try to impact their client’s decisions by providing correct but potentially contrary advice to their emotions. The summary answer is:
“I must be very careful. Family dynamics are complex. My typical client is the traditional two parent stakeholder household. This often results in one stakeholder more likely to place heavier weight on the financials and the other stakeholder placing more weight on the wedding event. Sometimes these households are impacted by divorce or strained relationships. Household stakeholders are often not aligned on the wedding decisions.
I am careful not to get myself in trouble by overstepping my bounds. With that said - a typical outcome is that at least one of my stakeholder clients feels some dissatisfaction that they did not get as much value out of the wedding as they wish they could have.”
Please follow the next link to the content and a wedding decision smartphone app support intended for a financial planner’s clients. The solution is designed to artfully help financial planning clients make the best wedding decisions. The app is designed to include the financial planner's input as much, or as little, as the client stakeholders may desire. But either way, the financial planner will get credit for providing a solution helping to bring together the families. This is achieved in a way that both presents the long-term financial impacts of the wedding decision and includes all stakeholders who have input into the wedding decision. The outcomes are fast, confidence-inspiring, and transparent wedding decisions.
The next wedding planning article and app may be sent to your client. Next is a sample message introducing them to the wedding decision-making support. This communication enables the advisor to remain objective, independent, and feel good they are helping their clients achieve their financial goals.
“A behavioral economist friend of mine wrote this article for his son. It helped the soon-to-be-married couple work through all their wedding trade-offs. He provides a decision app for wedding planning decision-making. It is worth considering for your wedding decision-making.”