The Essential Advisor

Clients under the age of 40 demand digital services and automated advice platforms, and among those who are under the age of 30, 77 percent said “they would leave a wealth manager who did not offer digital communication and service channels. Ninety-nine percent of clients under 30 are interacting digitally, while only one-third of clients over 60 interacts digitally,’’ they write.

Equally noteworthy, “more than 40 percent of (those) under 35 are making their own investment decisions.’’ And consumers of the future “will look for services that focus more on planning and less on investment management,’’ Crager and Hummel write.

So, financial advisors will need to know how to collect and distribute data to their clients. The authors favor a holistic approach to data aggregation.

“The only way to be able to deliver on this future of holistic financial advice is by seeing the entire financial picture of the consumer in one place. The essential advisor will find ways to use data to bring clarity to financial challenges and improve the consumer’s decision-making. Once the raw data is distilled into understandable units, it will be available to consumers on digital platforms such as personal computers and mobile phones.’’

Crager and Hummel see the digital marketplace not as a threat, but as an opportunity.

“There will be even more choices to consumers with small and medium-sized investment portfolios. Investment management will not set advisors apart from robos. Financial planning, coaching and deeper relationships will be the value proposition of the future.’’

The Essential Advisor: Building Value in the Investor-Advisor Relationship, by Bill Crager and Jay Hummel. John Wiley & Sons. $40. 204 pages.

Eleanor O’Sullivan is an award-winning freelance journalist who writes for Financial Advisor magazine.