The benefits of financial wellbeing

A photograph of a steaming mug of coffee on a table with a closed book in the background
For financial professionals only

Parmenion supports the Initiative for Financial Wellbeing (IFW). It’s not for profit and was founded by advisers. The current Chair, Chris Budd has written this article to explain what financial wellbeing really means, how it can add value for your clients and why you might want to get involved.

Originally there was financial advice. Let’s call this version 1.0. It’s a process by which a financial adviser uses technical knowledge about pensions, investments, and tax, to provide advice to clients on what’s best for them.

Then came financial planning – advice version 2.0. Powered by cash flow forecasting, planning builds on advice version 1.0 by giving advice on how the client might get to where they want to be (or say they want to be). A powerful upgrade.

Advice v3.0

Financial wellbeing is what I call advice version 3.0. It adds two important skills to the technical and planning knowledge:

  1. Understanding what makes us happy – a huge amount of research has been done on happiness, yet it has virtually never been applied to the financial planning process before. Financial wellbeing helps brings these two things together.
  2. Coaching skills – this may mean focusing more on listening and questioning, something that is much harder than it may at first seem. By changing the focus of the meeting away from just being about investments for their future, the client outcome is much more likely to be on their wellbeing.

This is important because what clients tell their financial adviser they want from their financial plan, often is not what will maximise their wellbeing and happiness.

Financial coaching can involve looking much deeper into the clients’ relationship with money. All of this is part of financial advice version 3.0.

The IFW is here to help

The IFW was established by advisers to focus on this type of advice. Joining is simple and inexpensive at £15 per month plus VAT.

By getting involved, you will:

  • Get access to training and events geared to helping you to help your clients be happier, not just wealthier
  • Join a community of like-minded people
  • Help support the cause of the IFW and help generate social impact

Their annual conference is on May 25th. Or by joining, you could take the IFW’s Financial Wellbeing Certificate, attend their monthly round tables and regional meetings or listen to a monthly wellbeing café.

This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.  

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