Creating the optimal wealth management experience is all about improving the advisor/client experience. To do their best work together, advisors and clients should have a frictionless environment where clients are free to dream, fear and evaluate trade-offs among a constantly changing set of real life challenges. In the ideal state, advisors are able to prioritize their precious time, attending to the most pressing needs of the most valuable clients. In the most efficient practices, clients can self-actualize mundane needs like money movement with a few simple clicks of the mouse and their advisors are alerted when more complex issues arise – before the clients are aware. Above all, this perfect world is a partnership based on transparency, objectivity and trust. New prospects arrive regularly based on ravings of the clientele. The bad apple seeking only to beat the market (every quarter) is politely shown the door. Best of all, the client service team can’t imagine a better place to work and passes their jobs along to younger recruits drawn from a robust talent pool.

The essence of wealth management is developing superior client solutions while creating an environment worthy of both our advisors’ and associates’ best efforts. We know we are making progress only when both parties to the effort – the clients and their advisors – can together focus on the highest value issues. But no single element can carry all the water. The eco-system provides the interplay between “living” and “non-living” elements -- the dual and complementary roles of technological efficiency and human touch. FinTech is not a replacement for advisors, it is a toolset that creates capacity and better service. The second Wikipedia definition – the digital ecosystem – goes further: “adaptive..open.. self-organization.. scalability ..sustainability”. The ecosystem is less a collection of parts than it is a dynamic combination of elements that evolve with changed conditions. Competitive wealth management offerings should have the same flexibility. Managing a top wealth advisory practice is a noble calling – a desire to help people and a commitment to improve.

We can debate the key parts of a wealth management ecosystem, so I will start the dialogue with my Nine Essential Elements of Wealth Management. Committed as I am to the eco-system view, I have the luxury of starting from scratch – no small advantage in a practical business world where the status quo is the most powerful adversary. I base my list on the importance to the advisor/client relationship and the seamless partnership implied:

The Nine Elements of Wealth Management

  1. Whealthcare – Client surveys consistently reveal the importance of health care, fears of cost and the implications of longevity. Perhaps the oldest principle in financial planning is the tension between health and wealth. Wealth without health – or health without wealth – has profound implications for effective financial planning. So how to manage the convergence of health care planning and financial planning? In addition, planning for health and wealth realities increasingly needs to span generations as families cope with the impact of aging and longevity relative to each group’s level of preparation. Ask aging Boomers about their parents….or adult children.
    • Elements for Evaluation
      • Methodology for longevity planning
      • Methodology for evaluating health care costs
      • What is the assessment method for determining capability in decision-making – and how is this capability made available to the clients?
      • How are aging relatives included in the planning process?
      • What is the role of long term care in the planning process?

 

  1. Tax Efficient Investing – and Planning – Wealth management without tax-smart household management is an incomplete solution. Tax efficiency should be embedded in financial planning recommendations across multiple accounts, products and models to improve asset location. Asset location improvement can be quantified and demonstrates significant investor advantage. And tax-optimal management should be included as part of the prioritization of retirement distributions from multiple sources including Social Security and conversions of traditional IRAs to Roths.  Tax management across the household from accumulation, ongoing management through to withdrawal and bequest is a significant opportunity to earn, retain and grow relationship fees as well as give cause for asset consolidation.
    • Client Account Information Aggregation
      • What is the process for aggregating client information?
      • Does the client aggregation system have a client portal?
      • Does the aggregation program provide householding?
      • Does the aggregation program optimize asset location?
    • Tax Efficiency

 

  1. Regulation and its Impact on Client Engagement and Risk – A challenge to wealth management firms is how to balance a highly customized client solution within appropriate risk parameters, and also support effective advisors while complying with industry regulation. Regulation and risk are disruptors, including the establishment of a fiduciary standard with revised definitions of conflicts. There is also a fast-growing trend of consumer protection legislation and regulation at the state level. Irrespective of final dispensation of rules proposed by the SEC, a heightened standard of care is in demand by clients with increased transparency and attuned to potential conflicts of interest. Increased regulation is tracking with increased marketplace forces.
    • Client Suitability
      • How do you review suitability in the context of client experience?
    • Trusted Contact
      • How do you collect trusted contact information?
      • How is trusted contact used in the client experience?
    • Fiduciary
      • How do you manage your role as a fiduciary?
      • How do you describe your role as a fiduciary?

 

  1. Digital Investment Services – Have you fully embraced the rise of digital investment and planning services? Not just “robo” advisors, digital services represent a distinct and growing consumer preference for engagement. Successful wealth management firms are learning to provide more services through digital avenues to first meet client expectations and then to reduce demand on service staff. Though human advisors will always provide essential contact and behavior modification that benefits their clients, wealth management firms will increasingly leverage digital tools for service, investment management and even advice with benefits that include reduced variation in the solutions provided and increased time for human advisors to work directly with clients.
    • How do you incorporate digital investment services in the practice?
    • How do you incorporate digital capabilities in your customer service?

 

  1. Automation of Client Data and Adoption of Centralized Data Management – The fundamental issue is client data is not seamlessly connected. Clients assume their important personal data is well known to their financial partner and across the firm. Full adoption of CRM and complete client profiles is needed to support better and more personalized engagement. CRM allows engagement of the client at scale – maintaining key data points and tracking activities to feed ongoing client service needs and proactive communications. Clients can help customize their experience by making choices about offers presented by centralized communication channels. These choices feed an ongoing client “journey” using artificial intelligence to refine and enhance the client experience. Most important – client data feeds pro-active communications and reveals the best opportunities for advisors.
    • The CRM capability
      • Describe your CRM capability and how it is used in the practice

 

  1. Communications – How easy is communication with your company and with your advisors? Table stakes in the wealth management industry is the seamless communication among advisors, clients and the host firm across channels of live interaction -- telephone, web, and mobile devices that include text and video. The most basic standard by which to retain a wealth management firm – or any professional service – is the ease of communication. Data dependent and increasingly data-driven, effective routing strategies, messaging and CRM input are among the necessary capabilities for the firm serious about wealth management. The acid test? If a client calls, emails or texts ANYONE at your company, does that person know the client’s last action?
    • Communications systems
      • Describe communication choices for clients

 

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