Bringing financial planning to the masses

Investment Executive | Greg Dalgetty | Sep 3, 2019

advisor customer relationship - Bringing financial planning to the massesA new tool allows advisors to offer a “lighter financial planning experience” to smaller clients

Why go to the effort of creating a detailed financial plan for a client who won’t even read it? Or what if a prospective client wants help with financial planning, but doesn’t currently have enough investable assets for you to take them on?

MoneyGaps, a new tool for advisors, could be a solution to these issues.

The web-based platform offers a “lighter financial planning experience,” designed to make financial planning more understandable and accessible to the masses while still allowing advisors to make a buck, says company founder Preet Banerjee.

Advisors create their own MoneyGaps profiles using their headshots and logos, and the platform handles most of the rest.

“It’s not as time-intensive for the advisor, but it allows them to take on clients that they were otherwise turning away,” Banerjee said in an interview.

Banerjee, a former advisor who works as a consultant to wealth management, conceived of MoneyGaps while working on a research project for his PhD in business administration. His mission: to quantify the value of financial advice across different delivery channels.

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As part of the project, Banerjee hired an innovation lab to study the advisor-client relationship. The research found that financial plans were “one of the biggest common pain points” between advisors and their clients, he said.

“A lot of financial advisors have said, ‘We spend a lot of time creating these detailed plans — and sometimes they’re relatively thick financial plans — and we know that clients do not read them,’” Banerjee said. “MoneyGaps focuses on simplicity. Essentially what we’re doing is building a financial report card for people.”

The report card is generated by what Banerjee refers to as the platform’s “bread and butter” feature — a “gaps analysis” that gives a client letter grades based on their performance in eight financial categories: debts analysis, emergency fund, disability insurance, estate planning, life insurance, retirement planning, educational planning and cash flow.

The client answers a questionnaire for each category to receive a letter grade. MoneyGaps then assigns the client an overall grade (based on the average grade for each category), and advisors can generate a PDF report card for their client with the click of a button.

Banerjee described the report card as “very intuitive” for clients to understand. “That was critical for the MoneyGaps experience, in my mind,” he said.

Advisors have the option of overriding a letter grade if they choose to, although Banerjee said most advisors currently on the platform are happy with the grades generated.

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Advisors can also use MoneyGaps to provide recommendations to clients based on each gap analysis. The platform generates its own recommendations, such as creating a monthly budget for a highly indebted client, but advisors can also make custom recommendations.

For every recommendation, MoneyGaps automatically generates a reasons-why letter — the same as what’s currently required for life insurance recommendations — that explains the rationale for the letter grade a client received, what the advisor’s recommendation is and what the client’s decision is.

“The advisor would print this off, have the client sign it and keep a copy in the advisor’s records,” Banerjee said. “Not only is this good from a compliance point of view, it’s good for making clients really think about the decisions that they make.”

Reasons-why letters, which are two pages, are automatically dated and time-stamped, and a record of signed letters is kept in a decision journal. If, for example, a client who declined to buy life insurance died and the client’s spouse accuses the advisor of failing to recommend life insurance, the advisor would have the client’s signed reasons-why letter in the decision journal.

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