imgbd Futurist Edge: Technology Perspectives

This new tool is reshaping the financial advisory practice

In a nutshell

We've seen a lot of software tools being introduced in the financial advisory space over the years. Most of these tools represent incremental steps forward in strengthening various aspects of the financial advisory practice - planning software, research software, reporting software, asset allocation software, risk management software, CRM software and so on. But one tool that's caught the fancy of futurist minded financial advisors, and which promises to reshape the way you engage with your clients and your ability to demonstrate value to them is the introduction of mind maps in the financial advisory space.

Futurist Edge - a joint initiative between DSP Blackrock and Wealth Forum, brings you cutting edge ideas on technology and practice management, which help you become future ready.


What are mind maps?

Here's how Wikipedia defines a mind map: "A mind map is a diagram used to visually organize information. A mind map is often created around a single concept, drawn as an image in the center of a blank page, to which associated representations of ideas such as images, words and parts of words are added. Major ideas are connected directly to the central concept, and other ideas branch out from those."

Imagine yourself at the commencement of a fact find process for drawing up a financial plan for a new client. You could go through a 10 page questionnaire, in which only you know why you are asking certain questions, how they link up with different aspects of the plan, and therefore their relevance and importance, with your client clueless during the process and therefore rapidly getting disinterested. Or you can start by drawing a mind map, with your client right in the center of this map. From this central point, as you talk through different aspects of the plan - like protection, investments, cash flows, estate, financial goals etc - you start creating branches that branch out from the center. Each branch, as you talk through, will have sub-branches that get drawn as you speak. For example, protection will have sub branches for life, health, property etc.

As you keep drawing the mind map, you can organize it in such a way that all the elements of the plan are drawn on one side, and the processes that you will undertake in this process can be drawn on the other side. Branches on the processes side can include communications, reviews, tax planning, administration etc. Each of these branches can also have sub-branches. For example, communications can have several sub-branches - each of which will depict the various types of periodic communication that your client can expect from your firm.

As you keep discussing and adding various branches, your entire financial planning process becomes very clear in a visually simple manner to your client. The beauty of a mind map is that in a single sheet of paper, with one visual, you would have taken your client through the entire planning process.

One example of a mind map (without any sub-branches) is shown below:


Here's a demo on creating a mind map from one of the software providers of mind maps for financial planners:

Benefits of mind maps

Mind maps are powerful tools to help clients understand interlinkages between various aspects of the plan and what fits where, because everything is put into one diagram.

At the end of your meeting, when you print out the map, sign it and hand it over to your client to take back home, there is an immense sense of satisfaction for your client as the deliberations of the lengthy meeting have now been reduced into a one page diagram which he can refer to anytime later as well.

Mind mapping software help link documents to each image/branch, so that everything relating to the client is easily accessed from the mind map. Under the estate branch for example, you can click on a link that opens up the latest will that has been executed. Clicking on the Reviews image in the mind map can link into the latest portfolio review conducted and action points discussed, with an implementation update. Every aspect of your client engagement, every single document pertaining to the client can be linked into the relevant branch within the mind map. During this process, you often discover documents that cannot be linked into an existing branch and therefore create another one. Your mind map therefore represents a 360 degree view of everything you and your client need to know.

Mind maps - because of their visual appeal coupled with their comprehensiveness, help clients understand very clearly the value you are adding in their financial lives. Mind maps are seen as one of the best tools to demonstrate VoGA (Value of Good Advice), which puts you in a much better position to command a fee for your service.


Content is created by Wealth Forum and must not be construed as an opinion by DSP Blackrock MF.

Share this article