WEALTH MANAGEMENT

How Behavioral Finance Works

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woman and man smiling and talking in business setting

What does money mean to the client?

By Rory Henry
The Holistic Guide to Wealth Management

I decided to call my book “The Holistic Guide to Wealth Management” because leveraging a suite of financial services offerings that work in harmony with each other is a powerful business model that can transform your firm. The transformative power of this model, however, is based on the human side of the advice we provide clients and how we can improve their lives. It’s about shifting the conversation from integrating and delivering services to clients to gaining a deep understanding of a client’s values and what gives them a sense of well-being.

MORE: Manage Change through A PACT | Priority No. 1: Your Mental and Physical Health | Trust Is the Primary Ingredient | How to Prepare Your Clients’ Kids for Their Inheritance | Annuities and Insurance Growing More Attractive | Quantifying the Value of an Advisor | Raise Your Rates to Change Your Clientele | How WealthTech Is Reshaping the Future of Holistic Advice | Profile of a Modern Firm: Putting the Vision into Practice | Tsunami of M&A, PE Is Disrupting the Accounting Profession | Introducing You to a Fulfilling Return on Relationships
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What is behavioral finance?

The Corporate Finance Institute defines behavioral finance as “the study of the influence of psychology on the behavior of investors, as well as on financial analysts.” Dr. Daniel Crosby, chief behavioral officer at Orion, and author of best sellers “The Behavioral Investor” and “The Laws of Wealth: Psychology and the Secret to Investing Success,” takes it a step further.
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Nicholson, Fox: Exit Planning and the Psychology of Letting Go | Holistic Guide to Wealth Management

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“No one wants to leave the IRS more than they have to.”

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By Rory Henry CFP®, BFA™
For CPA Trendlines

An estimated 10 to 12 million Boomer-owned businesses are expected to transition over the next decade. That’s a massive wave of planning, liquidity events, and legacy questions. Yet experts say most owners don’t engage advisors until they’re well into the deal process.

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“By the time they come to us, they’ve often already signed a letter of intent,” laments Randy A. Fox, CFP, AEP, founder of Two Hawks Family Office Services, on a recent panel discussion for contributors to my new book, Holistic Guide to Wealth Management. “That shuts the door on a lot of the strategies that could have helped them keep more of what they built,” Fox added. 

Fellow contributor and panel discussion guest Christine Nicholson, author, business consultant, and exit planning specialist, has worked with hundreds of owners. She sees the same distorted view of reality cloud their thinking — owners mistakenly assume their kids will take over and believe their business is worth far more than it really is. READ MORE →

Priority No. 1: Your Mental and Physical Health

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Henry
 Rory Henry, a Behavioral Financial Advisor, is the director at Arrowroot Family Office and co-founder of AFO Wealth Management Forward. He has created a program to help accounting professionals incorporate holistic wealth management and proactive planning services into their practice.

Read this before you start adding new service offerings to your practice.

By Rory Henry
The Holistic Guide to Wealth Management

Most of you reading this article are highly motivated, highly disciplined individuals with a keen eye for detail and incredible dedication to your clients. I’m sure many of you are thinking about ways to squeeze even more productivity out of your day so you can find time to incorporate financial advisory services into your thriving practice.

MORE: Build Stronger Financial Futures with Health Care Planning | Marketing Strategies for Wealth Management Services | An Accountant’s Role in Exit Planning | Trust and Estate Planning Is for Clients of All Ages | Help Clients Manage and Embrace Investment Risk | Tax Advisory Services: A Pathway to Greater Financial Freedom | Leverage AI to Grow and Protect Revenue: Six Steps | Four Ways to Provide Wealth Management in Your Accounting Practice | What Multiples Mean to Accounting Firms | How Wealth Management Has Evolved | Why Now Is the Time for CPAs to Embrace Wealth Management
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We all know about the burnout epidemic plaguing the accounting profession, and it’s not just a mental health issue. Before you start burning the candle at both ends, please review the cautionary tales of highly accomplished CPAs and entrepreneurs below who’ve had to make significant recalibrations to their lives when their health ultimately failed them.
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Crosby, Johnston: A Human-First, Tech-Forward Future | Holistic Guide to Wealth Management

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Research shows that money activates more areas of the brain than sex, death, politics, or religion.

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By Rory Henry CFP®, BFA™
For CPA Trendlines

A recent McKinsey study found that the demand for holistic financial advice increased 60% from 2018 to 2023. Meanwhile, another McKinsey study projected a shortage of 100,000 financial advisors by 2034. That gap is leaving a massive opportunity for CPAs to step up as holistic advisors. 

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BUY the Holistic Guide to Wealth Management

A recent Holistic Guide to Wealth Management book panel discussion with two industry luminaries showed that CPAs who are in the best position to thrive as holistic advisors are those who use technology to deliver deeper planning and relationship-driven advice. 

“Traditional econometric models were all predicated on this idea that people were rational,” notes psychologist, author, and behavioral finance expert, Dr. Daniel Crosby. “What we actually know is that it is perhaps least true of us when it comes to money.”  

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Build Stronger Financial Futures with Health Care Planning

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portrait of Christine Simone
Simone
 Christine Simone is the CEO & co-founder of Caribou, a software solution for the finance industry to include health care costs and plan optimization in financial plans.

It’s a top expense and source of stress.

By Christine Simone
The Holistic Guide to Wealth Management

Financial advisors are well suited to help clients with all the important decisions in their lives. But that doesn’t mean advisors always recognize the areas in which clients need the most help.

MORE: Marketing Strategies for Wealth Management Services | Trust Is the Primary Ingredient | How to Prepare Your Clients’ Kids for Their Inheritance | Annuities and Insurance Growing More Attractive | Quantifying the Value of an Advisor | Raise Your Rates to Change Your Clientele | How WealthTech Is Reshaping the Future of Holistic Advice | Profile of a Modern Firm: Putting the Vision into Practice | Tsunami of M&A, PE Is Disrupting the Accounting Profession | Introducing You to a Fulfilling Return on Relationships
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Take health insurance, a big concern for people across all income groups. According to a 2021 report from Spectrem Group (now part of CEG Insights), two-thirds of affluent investors (65%) say they want their advisors to help them with health insurance, but only 4 percent said their financial advisors are providing it to them (see bar chart). Further, among people who don’t have financial advisors, the top areas for which they would want guidance are retirement income planning, Social Security planning and Medicare advice.
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