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Back to the Future: Financial Intimacy

Let’s get into our souped-up DeLorean and travel back to that fateful day in November 1994 when Netscape Communications announced the widespread availability of its Internet browser.

This event irreversibly changed the future for those professionals providing legal, insurance, accounting, planning or investment products and services to clients. Until then, there was no SelectQuote, LegalZoom, Ameritrade, Mint or QuickBooks. Before the Internet became ubiquitous, consumers who needed insurance, investment, legal, financial planning or accounting services consulted with the appropriate professional. Producers and advisors held the reins on the availability of – and the advice provided about – those services.

In the late 1990s, Forrester Research examined changing consumer behavior in light of the relatively new and soon-to-become widespread use of the Internet. It found that the classic role of the advisor was going through a radical transformation. Forrester saw a balance among three important aspects of the advisor-client relationship: The advisor provided advice on which research to read and which products to buy, oversight of changes due to financial or life events, and intimacy, the emotional insight into a client’s unique approach to managing money.

Rapidly, the influence exerted by universally available information changed the course of that relationship. Oversight had become increasingly self-directed and perhaps even devalued. At the same time, advice had become widely available from multiple sources and perspectives, generally at little or no cost. Fortunately, intimacy had increased in value to particular clients who had become awash in impersonal financial information and advice that may or may not have been accurate or relevant to their situations.

So the future is now and the question has become "What type of client values and craves financial intimacy?"

Forrester identified three major categories of consumer behavior: Delegators, Self-Directors or Validators.

» The smallest of the three groups, Delegators, at first seem like ideal clients. Once they like and trust us, they’ll respond with “Whatever you say; just tell me what to do, where to sign …” and, as appropriate, “when to get the exam.” They don’t want a lot of details – they just want things to get done. Unfortunately, they also are the first to complain or sue when something goes wrong.

» The somewhat larger group of Self-

Directors are those who are lined up outside Home Depot at 5:55 a.m. most Saturdays to load up on supplies for the weekend’s projects. They tend not to want to pay for professional advice and are comfortable tackling do-it-yourself (DIY) wills, tax preparation and online term insurance. Unfortunately, the financial consequences for the DIY group can be much more severe than a poorly installed faucet or an out-of-alignment crown molding!

» The good news is that more than 50 percent of consumers are Validators. These individuals don’t want to know everything that I know – but they want to know enough to be engaged in the planning process. Better yet, when they ask a question, they want to be able to reasonably apply the answer to their own circumstances. Validators want engagement, and financial intimacy is the hallmark of the ideal client.

Financial intimacy is the one essential domain that the future has provided to us after product access – and, to some extent, advice – has fallen from our sole provenance. Creating an appropriate sense of financial intimacy with a Validator is the way we add significant value to the advisor-client relationship. The ability to work with other specialists – for the benefit of the client – also enhances intimacy and collaborative value.

Understanding and advising clients on optimizing Social Security is just one example that comes to mind in thinking about the need for collaboration among advisors. We all know that the decision about when to begin taking Social Security benefits can be complicated and that there are a lot of moving parts. Social Security election decisions may be influenced by family and financial circumstances. The arcane formulas surrounding how Social Security benefits affect income taxes – exacerbated when required minimum distributions (RMDs) kick in at age 70½ – add to the overall complexity of the decision as to when and how we take benefits. And how might we structure distribution timing from taxable qualified plans and Roth accounts and other nontaxable sources? Certainly, it takes advisors able to assess all the moving parts and formulate an understandable strategy. 

Our brief trip back in time has revealed how dramatically our landscape has changed, yet the future is not bad – it’s just different. It’s about delivering value through financial intimacy to the large group of clients who truly want and seek an active partnership in the advisor/client relationship.

Richard M. Weber, CLU, MBA, AEP (Distinguished), is past president of the Society of Financial Professionals. A 45-year veteran of the life insurance industry, he is a consultant to insurers and their agents on the topic of effective and ethical selling. Contact him at

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