“Most advisors are not only unprepared for the ongoing demographic shift, but they’re not prepared for the accelerating shift from advisor-focus to consumer-focus,” said Anderson.
Along similar lines, Chicago-based Envestnet created “The Advisor's Playbook for Leading Your Clients Forward” for advisors to help them navigate a post-Covid world where social distancing and technology have transformed ways of doing business.
“Covid-19 has changed the way we live and increased the speed of changes that were already occurring,” said John Harris, managing director at Envestnet. “Some things have become less relevant, but we’re not abandoning the path the industry was on prior to the pandemic. Some things are just speeding up to a degree.”
The playbook outlined six changes that have occurred or been accelerated during the pandemic:
- A new level of trust and relevance is expected for clients.
- The outbreak changed what it means to be prepared as an individual and as a business.
- Digital communications have to become “more human.”
- Health and wealth have become inextricably fused.
- Families and communities are leading the way in redefining lives.
- There is now an increased emphasis on sustainability.
To build trust and relevance, Envestnet recommends that advisors lead with empathy, but also take efforts to make sure clients’ sensitive information is protected from cybercriminals and others.
“It’s an opportunity for advisors to recognize that there are strange and unique things happening within their clients’ lives right now due to the virus, and it’s causing them concern,” said Harris. “Not only should you help advisors voice those concerns, you should help them recognize that it’s not unusual: we’re all feeling this way.”
Envestnet also recommends that advisors segment their clients and deliver more personalized experiences to demonstrate that they understand each client and family’s unique needs.
To help clients be more prepared, advisors should simplify the planning process and personalize it to specific goals and concerns. To act on these goals and concerns, advisors should gamify the planning process.
Clients are being bombarded like never before with information—and a lot of it is noise—coming from analysts, columnists, social media posts and bloggers.
“We believe it’s an advisor’s responsibility to help navigate a lot of that information, it confuses clients and often prompts the wrong kinds of actions in the portfolio,” said Harris. “Guide them to relevant information. There’s so much bad information it’s overwhelming.”
Advisors also need to regularly review clients’ views on risk and adjust their plans, putting their concerns in perspective with advance planning and risk tools.
Social distancing and work-from-home set ups have forced advisors to use digital communications tools, but most advisors have yet to humanize their communications with clients, according to Envestnet. To be more effective digital communicators, Envestnet argues that advisors need to take advantage of both automation and personalization.