[Looking across the industry, there is a growing movement of advisors wanting to differentiate themselves by employing a more holistic private wealth or family office business structure that deeply embeds their services into the client's financial, family, business and aspirational life. It represents a shift in business management mindset to focus firm goals towards more comprehensive client engagement and investing financially, culturally and strategically in client experience. The need for this more encompassing business model of “Client Life Management” is backed by consumer studies like Accenture’s Wealth Management: The new state of advice, which reports on the rise of newly engaged investors with growing financial advice needs and expectations.
Technology plays a major role in actualizing this more comprehensive servicing and engagement strategy. Digital Vaults, as an example, can transform financial firms into delivering these modern, high-touch wealth and advisory relationships. They enable financial information, data and documents to converge in your firm as a single source, ultimately providing better insights, deeper engagement and more value across all stakeholders and family members in the client relationship.
To better explore the Client Life Management business model and the technology behind this modern movement, we reached out to Institute members Daniel Kenny, chief executive officer, and Kristian Borghesan, chief marketing officer, of FutureVault—an industry leader in digital vault and secure document exchange solutions, and pioneers of the Client Life Management Vault™. Having developed their digital vault technology platform into a best-of-breed solution for the wealth management industry, we asked questions to better understand how they developed their technology to power a more engaging advisor business model for heightened competitive advantage.]
Bill Hortz: How would you define Client Life Management and its range of services?
Kenny: Client Life Management is emerging as a new category within wealth management, representing a new paradigm in the way everyday client information, data and critical documents are managed, accessed, shared and advisor services are delivered.
Managed through digital vaults, this more encompassing wealth management offering drives deeper engagement and results in more value being delivered to clients by extending the value proposition outside of the traditional confines of wealth management to a more comprehensive service model that embodies the key areas of the client’s life and household dynamics.
Kristian Borghesan: At the core of Client Life Management is the aggregation of data, information and documents that span across a client’s personal, financial and business life. It offers a powerful driving force empowering firms and advisors to now confidently center themselves in their clients’ lives through their advisory relationship with them—from prospecting, onboarding and engaging all aspects of a client’s financial, business and personal life to wealth transfer strategies, legacy planning and more.
Hortz: You wrote recently that you saw enhanced client engagement as the new alpha for advisors and advisory firms. Can you explain your perspective on this?
Borghesan: According to the recent WealthStack Study along with findings from Franklin Templeton, investing in technology to deliver a unique digital client experience and drive client engagement will pave the road to success for the modern advisory relationship.
As we take a quick horizon scan across the financial marketplace and look at what the most recent trends have been telling us, it is evident and clear, now more than ever, that firms and institutions taking this road and seriously investing in client engagement will undoubtedly come out on top.
Daniel Kenny: Our view is quite simple. The firms and advisors that “get the closest” to their clients by virtue of understanding all areas of their lives, will be the ones that naturally end up winning the hearts, minds and wallets of clients and families, for generations to come.
Hortz: What role do you see that digital vaults play in enhancing client engagement?
Kenny: Digital vaults are the ultimate linchpin when it comes to Client Life Management and creating a multi-generational strategy. They are far more than a secure platform for document handling and exchanges to take place. Digital vaults are really about the information, data and documents inside of them; all of which are used to empower and drive deeper discussions and needed actions between firms, advisors and their clients.
Borghesan: Here at FutureVault, we are designing our technology towards how a secure digital vault serves as the single source of truth for the client’s life from onboarding and planning through to ongoing processes that revolve around information, data and documents. By having everything centralized in one spot, everyone wins. The home office and compliance teams win, advisors win, and, most importantly, clients and their family members win.
Hortz: How can the Client Life Management approach create client family loyalty and stickiness across generations? Can it help position an advisor to win the Great Wealth Transfer ahead of us?
Borghesan: Let us look at the stats here for what we know to be true. We know that more than 70% of heirs to wealth are likely to fire or change financial advisors after inheriting their parents’ wealth, per Cerulli Associates research. Simply put, this cannot be glossed over or kicked down the road for months.
But there is a silver lining here. This impending challenge presents a real opportunity for institutions, firms and advisors to gear up to demonstrate their value and cement trust across generations.