Clients View Money and Wealth Differently

There are inextricable links between money and wealth. Rare is the person that is widely viewed as “wealthy” without a lot of money.

However, the definition of wealth is evolving. Yes, to some extent, wealth will always be perceived as a financial concept. If it wasn’t, there’d be no point to working, saving and investing. Still, there’s mounting evidence suggesting clients view being wealthy as being more than attaining financial affluence.

On that note, advisors should heed the insight provided in the new 2023 Schwab Modern Wealth Survey. Indeed, there are clues in regarding how clients view money and wealth and some might surprise advisors.

Seventy percent of respondents “said that wealth is more about not having to stress over money than having more of it. Again, having more doesn't hurt. Having enough, though, and managing it to live well, retire, and achieve key financial needs can reduces stress, increases confidence, and provides more choice and control,” according to Schwab.

Things Money Can’t Buy

Good health, love and more time are prime examples of things that money cannot buy, but everyone wants more of. Obviously, advisors cannot create more time nor are they doctors or matchmakers. Still, it’s vital that advisors realize that those concepts and others are viewed by clients as elements in wealth.

“What's particularly interesting is that those surveyed mentioned well-being (40%) over money (32%) or assets (26%) when describing what it means to be wealthy. And they did this not by choosing their favorite answer to a multiple-choice question, but in their own words. Well-being was more important than anything else,” adds Schwab.

Again, advisors shouldn’t be in the business of dispensing relationship advice and time is arguably an esoteric concept. However, there are clear links between relationships, time and money. Seventy-two percent of those polled by Schwab say they’d prefer to have an enriched personal life compared to 28% that would rather focus on their careers.

Another 70% view not having to worry about money as an indication of wealth while the same percentage say they want to enjoy experiences. Nearly two-thirds want good health while just over a third want success in their careers.

Point is when acknowledging that improved finances can reduce personal stress and improve overall well-being, advisors – whether they realize it or not – play crucial roles in helping clients reach their desired non-financial versions of wealth.

Planning Matters

Another important point for advisors to remember is that to get clients to the point where they’re not worrying about, spending more time with family and embracing new experiences, planning is necessary. Fortunately, that’s right in advisors’ wheelhouses.

“Among survey respondents who have a documented financial plan, 70% said they feel more in control of their finances, 90% said they feel confident that they will reach their financial goals, and 65% said they feel ‘wealthy.’ And feeling ‘wealthy’ is much more than a dollar amount, as we've learned,” observes Schwab.

The good news is that clients are willing to embrace planning as highlighted by the fact that a record number are now investing on their, further cementing the need for a relationship with a professional.

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