Why Some Financial Advisers Focus on More Than Just Building Wealth
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This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
Here's your money briefing for Tuesday, August 15th. I'm J.R. Whalen for The Wall Street Journal. Financial advisors often work with their clients to find ways to preserve and grow their wealth. But some advisors are taking an approach to their work that looks beyond just making money.
Why are some financial advisers turning down clients who only want to grow wealth?
Some are looking at how they connect to broader questions about our happiness and trying to trace the line between the money people have and how they use it to their happiness.
We'll talk to Wall Street Journal personal finance reporter Joe Pinsker after the break.
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
How are advisers connecting money management to clients’ happiness and life goals?
Some financial advisors are being selective about the clients they work with, steering away from some whose goal is simply to keep making money. WSJ personal finance reporter Joe Pinsker spoke to several advisors and he joins me. So Joe, why are some financial advisors being choosy about the clients they take on?
Some advisors are thinking hard about the work they do and what it accomplishes in people's lives. The traditional way we think about financial advising is that it's someone whose job it is to increase and grow the amount of money you have and help you preserve your wealth. Some people are also thinking about the other money questions that arise that are connected to managing money. Things like donating to charity or other ways of thinking about what your goals are and what you want your money to do. So some advisors are turning down clients who don't have any interest in charity or seem to be purely focused on just making the numbers in their accounts bigger.
What types of money questions go beyond saving and investing to include giving and purpose?
But doesn't this run counter to why many people hire a financial advisor in the first place, you know, to help them build and maintain wealth?
Of course, it absolutely does. But these people are thinking deeply about the work that they do and how they feel about their jobs. It's something that's happening in the broader economy in lots of positions. But this is another place where I think people are wondering about the impact of the work they do. And this is a decision that not all financial advisors are making, but it's a certain way of thinking about it that connects to trying to think about how they can do some good in the world on top of the work that they're already doing.
What's the value that the advisors see in this way of thinking that would benefit investors really of any level of income?
The key idea that these people are circling around is that money issues are not just about money.
Why have conversations about meaning and money become more common among advisers recently?
You can hire a financial advisor to help the numbers in your account go bigger, but that's not the same as making sure that you actually are getting the most out of how you use money in your life. And so some of these conversations that people are having about donating to charity or about how they spend their money These line up with bigger questions about what it means to lead a fulfilling life. And certain financial advisors for a while have talked about those sorts of questions with clients. But I did hear from some advisors that in the past couple of years, those conversations have gotten a lot more common. So as we think about money questions, there are all these other bigger questions that come up and can be part of the conversation, too.
So what does this say about the importance of the type of advisor that the investor brings on?
Some advisors are going to be talking through questions that are purely about money, maybe calculating how much you want to be saving for your kids' college education, how much exactly you need to have socked away in order to retire.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:35
2
Why are some financial advisers turning down clients who only want to grow wealth?
0:35–1:21
3
How are advisers connecting money management to clients’ happiness and life goals?
1:21–2:25
4
What types of money questions go beyond saving and investing to include giving and purpose?
2:25–3:19
5
Why have conversations about meaning and money become more common among advisers recently?
3:19–4:37
6
Do advisers risk losing income by prioritizing clients interested in values-driven planning?
4:37–5:26
7
How should investors choose an adviser based on whether they want life-purpose or purely financial advice?
5:26–7:07
Speakers
3 identifiedMore from WSJ Your Money Briefing
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