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For most people, financial planning is difficult and complex - which is why they seek out professionals for assistance. Yet while the outcomes of working with a financial planner are positive, the actual experience of going through the financial planning process is not always pleasant. As one focus group researcher put it, "The financial planning experience is a blend of a dental exam, math class, and marriage therapy." And the challenge for growing a financial planning practice continues to become more difficult, given an increasing number of financial planning practitioners competing for business, with less and less differentiation from one firm and advisor to the next.

By contrast, the Build-A-Bear workshop provides an entirely different experience. Notwithstanding the fact that it sells teddy bears - a product long since commoditized - Build-A-Bear differentiates itself not by the product itself, but by the experience that customers engage in to get the teddy bear, as children visiting Build-A-Bear literally build the bear from scratch. The end result - the entire process turns from a few minutes at a cash register or website into a multi-hour interactive experience, the children have a much deeper buy-in to what they get (as their tagline notes, Build-A-Bear is not where teddy bears are bought, but "Where Best Friends Are Made"), and customers spend twice as much or more to get the same commoditized product at the end!

Which raises the question - what if the client financial planning experience was more like a Build-A-Bear experience, where your clients happily pay twice as much for your services and want to spend hours going through the process and the experience of it!?

The Build-A-Bear Workshop Experience

The Build-A-Bear Workshop is essentially a store for teddy bears. But what makes Build-A-Bear unique - a company founded 15 years ago and now doing approximately $400 million dollars of revenue per year, selling teddy bears in more than 400 stores spanning over a dozen countries around the globe - is that at Build-A-Bear you don't just buy a teddy bear; instead, you have a teddy-bear-buying experience.

Because, as the Build-A-Bear tagline states, you don't just go to the store to buy a teddy bear; instead, you go there to make a best friend. Accordingly, at Build-A-Bear, you don't just buy a teddy bear; you have an experience making the bear, from selecting its fur, to sewing in its heart, to choosing its clothing and accessories, and giving it a name. A video commercial of the Build-A-Bear experience is shown below:

Unfortunately, the reality is that for several years, the Build-A-Bear Workshop stock (ticker symbol BBW on the NYSE) has been languishing - generally blamed for overly aggressive expansion after its early successful years, being hammered by the economic recession, and a challenge with weak same store sales numbers (after all, once you build your best friend, there's not a lot of reason to go back again anytime soon!). Nonetheless, the point remains that the company sells a relatively old and commoditized product - a teddy bear - at a significant markup, and in a process that not only takes hours to complete (when in theory a teddy bear could be purchased in minutes), but is prized because it takes hours to complete!

In other words, Build-A-Bear Workshop is unique because they were able to turn a low-price commoditized product purchase into a higher-priced multi-hour teddy bear experience.

Today's Financial Planning Experience

While the delivery of financial planning isn't exactly a commoditized product like a teddy bear, it's hard to say much positive about the financial planning experience, either. Yes, the outcomes of going through the financial planning process are good, delivering both psychological value and according to recent research some real financial value, too. But that's the outcome at the end of the process, not the client's experience of the process itself.

So what about the experience? At a recent presentation for the FPA Retreat conference, Dr. David Lazenby perhaps summarized it best, based on recent research he had conducted with focus groups of actual financial planning clients. The conclusion: "The financial planning experience is a combination of a dental exam, math class, and marriage therapy." Ouch.

While such a characterization of the financial planning experience sounds quite harsh, upon further reflection it appears to be sadly accurate. After all, financial planning does involve taking people through a process where they are scrutinized regularly (and often feel guilty about what they know they should be doing but haven't, whether it's spending more responsibly or flossing more regularly). And it requires people to deal with more math than they may have faced since high school or college (but with higher stakes, as flunking here means failing to understand your financial future!). And with couples, it often puts clients in the awkward position of being forced to discuss, and find compromise (hopefully!?), regarding long-term goals and current trade-offs that they never even considered before.

Simply put - while the outcome of doing financial planning may be positive, it's hard to say much positive about the typical experience of going through it!

Envisioning A Better Financial Planning Experience

So what might a better financial planning experience look like? The starting point is to re-envision the financial planning process from the client's perspective, as the reality is that unfortunately, much of planning is really focused on the financial planner, even in what is intended to be a client-centric process.

For instance, look at the data gathering process. Most people don't have their lives in perfect order (if they did, they probably wouldn't be hiring a financial planner!). Yet many planner firms will not proceed with a financial planning process until clients provide all the necessary data and documents... even though, as just noted, most people don't exactly have this information at their fingertips in the first place! "We" as planners insist that we should have this information first, in order to do our work, and so that we "don't waste our time" working with incomplete data... yet that sets up an unpleasant and awkward experience for the client, who not only has to do the real work of getting organized up front and actually gathering data, but also likely feels guilty and ashamed of the fact that he/she doesn't have the information ready and available for the planner! By contrast, what if the process of getting organized was actually part of the financial planning experience, where clients came in with all their disorganized and scattered information, and we as planners gave them the actual experience of becoming organized during the meeting? Or the client "discovery" process of personal goals and issues was not just some notes a planner scribbles on a yellow pad, but an interactive mind map that the planner and clients build collaboratively?

Similarly, look at the process of delivering a plan and getting clients to buy in to the recommendations? Right now, plans are still often delivered as giant tomes, even though we collectively acknowledge that virtually no one reads them, and despite this we not only continue to provide them, but insist on updating them every time the client has a question or wants to try out a small adjustment! The end result - the planner provides a plan in the meeting, the client asks about the impact of retiring two years later, the planner re-runs the plan and sends it out a week later, the client asks about the impact of saving more money instead of retiring later, the planner re-runs the plan again and sends out another version another week later, the client asks about the impact of saving more money and retiring later, the planner re-runs the plan yet another time and sends out yet another version yet another week later... a miserable and unproductive process, to say the least! By contrast, imagine the results if the plan is simply live software on a giant screen in the planner's office, which can be updated interactively with the client? The end result - instead of a slow, tedious back-and-forth process that may literally take weeks, the client gets to test drive the financial plan in minutes and come to a conclusion that the client helped create - which improves buy-in to the plan and implementation of the recommendations to boot! (Of course, the caveat to this is that we also need some better financial planning software to help facilitate this process!)

Why The Client Experience Matters

I can imagine some people are thinking "but my clients are happy and they refer me already; why does all this matter?" The answer is three-fold.

The first reason this matters is because, in the end, most financial planning firms don't generate nearly as many referrals as they should given the significance of what we do to help people. In other words, planning firms grow by referrals despite how ineffective and uncomfortable the experience is, because the outcomes still that valuable. But can you imagine how many more referrals could be generated if clients left your office after having a great financial planning experience? Not a lot of clients share "Wow, what a meeting with my planner today. My husband and I left mentally exhausted, slightly confused, and barely speaking to each other after a fight about when we should retire; but hey, at least now we can go back in 3 weeks and find out how much we'll need to cut our spending to retire." Nor would many referrals come from sharing that experience anyway! By contrast, imagine if the outcome was "Wow, what a meeting with my planner today! We walked into that office with a giant box of scattered envelopes and papers because we never seem to have the time to keep up with it all. We left with a perfectly sorted box of file folders with everything where it needs to be! I've never felt so organized in my life!" Now THAT is an experience that will be excited to share and refer, and those who hear it will actually want to contact you and do business to get the same experience and immediate, tangible positive outcome!

The second reason the client experience matters is that as more and more people become CFP certificants and deliver comprehensive financial planning, the results of financial planning are becoming more readily available and it's important to maintain differentiation. The simple reality is that "customized, individualized personal financial advice delivered by a professional with extensive education and experience" just isn't much of a differentiator anymore. But having a fantastic client experience is. Although we're likely a long way from financial planning services becoming fully commoditized, there is nonetheless a rising challenge to maintain differentiation.

The third reason the client experience matters is simply your ability to price your services and earn a profit from them to run a successful business. The reality is that people will pay a lot more to an experience business that charges them for the feelings they get from engaging, rather than just a product business that sells stuff or a service business that charges for services rendered. That's why Build-A-Bear sells teddy bears for more than Amazon, and why we'll pay more for family tickets to a 2-hour movie experience at the theater than we will to buy the movie on DVD once and own it for life. This entire phenomenon has been dubbed "The Experience Economy" (after an article and later a book by Joseph Pine and James Gilmore), and represents an emerging new trend for businesses.

Or simply look at it this way - can you imagine how successful your financial planning business would be if your clients happily paid twice as much for your services and wanted to spend hours going through the process and the experience of it, just like families do with Build-A-Bear? How many referrals do you think you would generate if you gave your clients a Build-A-Bear-style financial planning experience?


  • Ira Fateman

    Although never having experienced the build a bear phenomenon your point about rethinking how we approach the financial planning experience is right on. Over the past few years I have limited the written financial plan to a short narrative indication the content area current status and recommended action. This narrative is no longer than 2 pages. I also produce a series of projections on cash flow, net worth, retirement projections and a monte carlo analysis. I have recently been bringing my laptop and altering variables based on client needs during our meeting. I find this a much more productive approach than generating long winded plans that are never read and change the week after you complete the process. The only guarantee I make for the financial planning process is that the plan will change as life does. A recent client has had trouble gathering information so we met and took some notes. They are going through exactly what you outline: frustration, guilt and no progress. We decided to start the process with the anecdotal information we have and take them along slowly. We met with them at their home and will go back to help them organize.
    Thanks for this affirmation of where our practice is headed.

  • Roger Whitney

    Wonderful topic Michael. Something I have been doing a lot of thinking about. David Loeper’s Financeware has attempted to give the client a better experience through it’s “wealthcare’ process. I think his has been a good start but it needs to be more.

    You’re right, the client should be participate and the process should be more fluid and alive then we make it.

    The client experience should be everything. Hopefully achieving it will not be my Moby Dick

  • Steven Barrett

    Great blog Michael

    I’ve only been planning for 2.5 years and I have always used software to present financial plans to clients. I couldn’t imagine another way of doing it. With the amount of detail in a financial plan, there is always going to be changes or additional what if scenarios that you didn’t do originally. Being able to make the changes there and then with the client saves a huge amount of time and results in decisions being made quicker. The client report is then a summary of the decisions they have made and what the results of it looks like. I don’t know what planning software is available in the US but I would recommend that every planner uses some package.

    I also love your idea of using mind maps in the factfind process. It is something I am going to use immediately as it will definitely increase client buy in.

  • Cal

    Interesting topic. I would only assume such a concept, where the client has more say and involvement would work out far better in the long run.

  • Robert

    Just to play devil’s advocate, going to the dentist is painful and uncomfortable, but people go because the consequences for not going are far worse. Can it be that the planning community has not done a very good job of convincing the public that the consequence of not planning are that dire? Or do most people feel that using a planner is ‘nice work if you can get it’ but in the end it is not essential? Isn’t being ready to face the challenge part of what makes a client ready to truly benefit from planning?

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  • Andrew

    I’ve been following you for a while – you present great articles. This one is no exception. I have been financial planning for 15 years and have my CFP®, which makes me common (i.e. your 2nd reason above). But I think the biggest obstacle is that financial planning is an intangible product (unlike a bear you can hold) – thus, why so many people deliver physical plans.

    I would love a world where the experience mattered the most however I have found that it is hard for people to buy the promise of strategies and recommendations up front – and even when they do take that leap of faith of buying an intangible, they are soon-after forgotten (which explains the re-delivery of FP’s after each change is made).

    I agree that the experience can and should be enhanced, but people need tangible reminders of that experience (they need pictures from their cruise vacation). Like you said, the industry knows clients don’t read the plans, but we still deliver them so our clients can “squeeze the bear.”

  • Brian


    I’m curious about your take on currently available financial planning software and “live planning”. I have actually been working on a project for about a year to create a “live planning” environment for our clients. We have traditionally used NaviPlan software to complete our financial plans. Profiles works pretty well in a live environment. NaviPlan Select/Extended Desktop does not in my opinion. It is not very client friendly in my opinoin. We have looked at a lot of other options. inStream and MoneyGuid Pro seem too simple for many of our clients. eMoney isn’t very user friendly either. Any other options we should consider or take a second look at?

  • Chip Simon CFP(tm)

    Just a comment…you are confirming the approach that ACA-trained planners have been using for years with a retainer-based model.
    We use modular appointments in step-by-step fashion rather than software driven plans, but that is just a feature of the system. The more important points for planners to realize is they want to create a better client experience is that: 1. the most important piece of financial information is sitting across the desk from you; 2. you need to talk about money the way clients talk about it; 3. clients want to be involved in the planning process but that does not mean filling our forms (there are none around here); 4.your job is to make clients smart, rather than making yourself look smart; and 5. put your arms around their problems, not their portfolio.

    The client pay-off? A good night’s sleep.
    The client perception of your practice? An ark…and they are glad to be on board.

    Thanks for the article.

  • Keith

    Michael, I agree that not only does it need to be a better experience. I also believe that it is about getting past the software and compliance questions to actually build a relationship. I am not talking best friends, but at least understanding more about a clients behavior. Too many financial advisors just want the data but not the why behind it. By going a little deeper into value and behavior you create a much better experience, because the client truly believes you care. I have been following Ted McLyman and his Command Pilot Program for FAs
    which speaks to this. You might use him for a future article/post.

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  • Steve

    Michael, good article. I couldn’t help but think of Money Guide Pro as i was reading. The use. Of play zone which allows for an interactive discussion around trade offs supported by the ability to place the output online for the client is a major improvement.

  • Michael Kitces

    We even see this trend playing out in dentistry though. “Painless dental care” is actually a marketing edge and premium service for many dentists (for which they can charge more). As is having televisions and movies playing while extensive dental work is done to make the experience less agonizing. Having a better experience is more profitable in any business.

    At a more general level, I really hope we have better alternatives for the success of financial planning success than trying to scare more people about the amount of pain they’ll face by not using our services. Even dentistry has tried to get away from so much fear-based selling!
    – Michael

  • Amit kumar

    I read your story on Why The Client Experience Matters is really nice post, if we want to explore our business the client satisfaction is necessary. thanku michal for sharing your opinion.
    Professional Financial Planning Services

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Michael E. Kitces

I write about financial planning strategies and practice management ideas, and have created several businesses to help people implement them.

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