Financial Planning Needs a New Language

The technical aspects of financial planning might seem overwhelming for many people. But when an advisor adds complexity by using confusing jargon and technical terms, it can make financial planning even more difficult. Often a prospective client will seek out the services of a planner because their life has become financially complex. They are seeking guidance to help them ‘make sense’ of their situation. When an advisor uses complicated financial language it hinders the process of developing a clear and effective plan the client understands.

Elements uses new terminology that is more relatable—and more motivational for the client. The old language of planning is based on a solitary event: the plan. Elements’ approach is focused on financial vital signs and an ongoing planning story that helps clients understand their financial situation better. It’s a story that is easier to understand, easier to share, and creates a shared understanding between the financial advisor and the client which leads to a more collaborative relationship.

By using easier to understand measurements and terms, Elements simplifies financial language for clients. One example is the use of the term “savings rate” to describe how much money someone saves compared to how much they earn. By using this term and showing how it is calculated, advisors are able to simplify the concept of saving money, helping clients better understand a key concept of planning.

Simplifying financial language and providing clear, easy-to-understand explanations can help build trust with clients and improve their financial literacy. And that will lead to better long-term advisor/client relationships and financial outcomes.

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