We all know the standard financial planning tableau: The smart office containing the eminent adviser, holding the leather-bound folio of the future containing “The Plan.” The lifetime plan for financial wellness — home to the 401K, investments, etc. that will make sure the client is adequately funded over the course of their life. After a quick run through the leather book, the adviser shakes the client’s hand and sends them on their way, with a plan to “see where you are” in a year or so. They might check in occasionally, but interactions with a financial planner are generally few and far between.
It is traditionally a fairly hands-off world, Northwestern Mutual Executive Vice President and Chief Operating Officer Souheil Badran told Karen Webster in one of PYMNTS’ ConnectedEconomy conversations — and the best-laid, leatherbound plans often wander off the prescribed path.
“You may have had a life event and changed your direct deposit. A child may have been born. One of your kids has left the home and now you’re an empty-nester, or somebody is getting married, et cetera,” Badran explained. “Those are signals that it might be time for a client to revisit their financial plan, but without having access data, those changes wouldn’t be known until the next scheduled call. So, we’re trying to be more proactive.”
Northwestern Mutual is about as far from a startup as one could get — founded 164 years ago, the firm has its DNA in the insurance industry. But it’s long since expanded into the world of investments and is now the fifth-largest broker-dealer in the industry. When asked if it sees itself as an insurance firm or an investment house, Badran had an interesting response: It’s both.
At base, Northwestern Mutual’s advisers, in combination with their advanced digital experience, aim to help clients achieve the best possible financial security outcomes by leveraging the tools of both investment and insurance. Badran noted that the firm’s financial advisers are trained to work with their clients to cut through the clutter and build financial plans that uniquely meet their needs for today and tomorrow.
“Our clients come first, and we’re here to help them achieve a lifetime of financial security,” he said. “So when we think about client experience, it’s focused on bringing that comprehensive planning to life in daily decisions to meet lifetime goals, and on delivering better outcomes and deepening that loyalty.”
The focus for Northwestern Mutual is to find a better way to leverage its advisers and its digital technology to create a better, more curated customer experience. For all the power technology has, the firm believes that financial advisers working in tandem with that tech is the best way to actually help consumers. The combination of insurance and investment is ideal, said Badran — because managing risk should be part of any long-term financial plan, and unknown factors can easily set a plan off course.
In fact, he pointed out, we all got a very real-time lesson in 2020 with the onset of COVID-19, and spent the majority of the year reacting to well-laid plans being utterly decimated. Every aspect of our daily lives changed overnight — and consumer demand rewrote itself. The embrace of things like instant payments, mobile wallets and food delivery platforms weren’t invented by the pandemic — they were already on the rise before then. But COVID-19 radically accelerated digitization, transforming it from a nice-to-have to a need-to-have virtually overnight.
And with that overnight change, Northwestern Mutual has seen the entire market start to think more comprehensively about what it means to really serve a client’s financial needs. The question in the connected era, said Badran, is how to make it as simple as possible. The competition is to build the easiest experience across the board, whether the customer is collecting a refund or insuring a business — and to find the right set of partners to make one’s offering and ecosystem more useful to the consumer.
In the connected economy, Badran noted, what it means to help a customer manage their financial lives is changing and expanding — and improving. Because with connectedness, clients are increasingly able to drive their own financial destiny and better manage their money.
“Ultimately, our aim is to create a different experience for insurance and investments,” Badran concluded.