In the Spotlight

Holistic Financial Planning Benefits Clients, Advisors

By Shelly Gigante

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Financial advisors who not only provide portfolio recommendations, but can help their clients reach their personal goals, may just gain a competitive edge as consumers increasingly value 360-degree planning.

Indeed, advisors who work with clients to create a comprehensive financial plan, rather than focusing on investment returns alone, will be better positioned to meet their clients’ expectations and fend off online wealth management services (so-called “robo-advisors”) that provide automated portfolio management advice for a fraction of the cost, said Craig Iskowitz, an industry blogger and chief executive officer of wealth management technology consulting firm Ezra Group in New Brunswick, New Jersey.  

“A lot of financial advisors will be out of business if they don’t evolve,” he said, noting holistic financial planning is better for clients who seek goals-based solutions and the advisor community, as well, as it brings the focus of money management back where it belongs.

“It helps take client’s focus away from investment performance,” said Iskowitz. “Too many advisors think their value-added is picking stocks and mutual funds for clients, which it clearly is not. That is a recipe for disaster, as no one, not even professional money managers, can beat the market every year.”

An emphasis on portfolio returns, he adds, creates endless conversations with clients about why the Standard & Poor’s 500 stock index is outperforming.

“Smart advisors are moving away from performance and taking the conversation towards how they can help their clients reach their financial goals,” said Iskowitz.  

The definition of holistic financial planning differs depending on who you ask. But generally it involves a comprehensive review of a client’s financial picture, starting with life goals. It incorporates insurance needs, cash flow considerations, retirement savings, education funding, charitable giving, and tax and estate plan implications.

In addition, holistic services can also be brought to bear on unexpected life events as well, like a disabling illness or accident, premature death, or health issues.

Often, outside financial professionals — including accountants, lawyers and insurance agents — are brought together as a team to help clients develop a 360-degree plan.

Traditional financial planners, by comparison, focus exclusively on maximizing investment returns and measure their performance against a benchmark, an older business model still embraced by many (especially older) clients.

 “There will always be people who just want an answer to their question or a quick fix without involving you in their decision making process,” said Hui-chin Chen in an email interview, a Certified Financial Planner® professional with Pavlov Financial Planning in Arlington, Virginia. “But people who are seeking true counsel will want a relationship instead of just information. Holistic financial planning offers that relationship.”

A 2013 survey by Princeton, New Jersey-based market research firm ORC International found seven out of 10 respondents prefer an advisor who has the ability to look at their whole financial situation as opposed to an advisor who specializes in one area (30 percent).

An overwhelming majority of consumers (91 percent) also expect the advice they receive from a financial advisor to take into account their total financial situation, an expectation that is largely consistent across all age groups, the survey found.1

Fueling Industry Growth

Online calculator and personal finance management tool sites, like and Personal Capital, some of which offer consumer recommendations, have helped pave the way for holistic advisors, said Iskowitz, giving consumers better perspective on their spending and saving patterns and empowering them to engage in the financial planning process.  

“Online tools have done a good job of helping consumers focus in on their savings and cash flow,” he said. “But there really are still no tools out there that can help educate consumers and bring together the disparate components of their financial lives.”

That’s where holistically-positioned advisors come in.

Holistic wealth managers ask pointed questions to help clients verbalize their personal, professional and financial goals, their investing philosophy, vision for the future and their charitable intent.

They help them tune out market performance, stay the course when volatility strikes, and establish the safety nets necessary to ensure life’s little hiccups (job loss, bear markets) do not derail their long-term plan.

Amid increased market volatility, rising interest rates and the proliferation of complex new financial products (think fixed-income alternatives and Exchange Traded Funds), Iskowitz said the role of a holistic advisor is also to educate their clients on the potential risks to their portfolio.

“Lawyers know their clients don’t understand the law and it’s their job to help them understand, and doctors have to communicate complex health concepts in a way that makes sense to their patients,” he said. “Financial advisors should be doing the same thing.”

Absent an industry standard on what holistic financial planning really means, however, financial professionals at the forefront of the movement have had to blaze their own trail.   

Some who are new to goal-based planning still focus largely on asset management, but have started incorporating big picture agenda items, like college funding, retirement, and philanthropy.

“I think we’re getting there in fits and starts,” said Iskowitz. “Different investment management firms are taking their own approaches and what they can and cannot do is often limited by what advisors understand and what attracts clients. They need to continue to serve existing clients because they are fiduciaries, but they also want to attract new clients.”

Impact on Clients

For clients, holistic advisors not only provide a tailored personal finance plan, but a single point of contact, a welcome dose of simplicity for most investors who juggle multiple savings, retirement, and personal brokerage accounts.   

“Clients like the idea of a 'caretaker,' someone whose job it is to look out for their overall best interest,” said Kevin Reardon in an email interview, a Certified Financial Planner® professional  with Shakespeare Wealth Management in Pewaukee, Wisconsin. “The CPA can only do so much, ditto for the attorney, ditto for the insurance agent, and ditto for the investment advisor. The holistic financial planner knows about each category and how they interact within a client's portfolio so we can help maximize opportunities and minimize pitfalls.”

The trend towards holistic financial planning is likely to continue as consumers embrace a more personalized approach to money management and advisors look to differentiate themselves from the competition online.

“I think it’s inevitable that holistic financial planning will become the norm for people who see themselves as fiduciary advisors,” said Chen. “As a fiduciary advisor, I am not able to offer advice in my clients' best interest without knowing more dimensions in their lives, why they are interested in making certain decisions, and how my advice may impact other parts of their lives.”


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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel.


1 ORC International, “Financial Advisor Consumer Survey,” 2013.