Although businesses are gradually reopening, the past few months have led Americans to ask themselves who they can turn to in moments of great uncertainty, and if their families are truly prepared. In the post-pandemic world, financial advisors and institutions will need to find new ways to address this anxiety, and embrace a new model of digital engagement that will play a meaningful role in how people prepare for the future.
The COVID-19 pandemic will have a significant impact on how essential advice is delivered, and measured, going forward. Advisors will need to adapt as client expectations, and the wealth management industry itself, evolve.
A New Level of Trust & Relevance Will Drive the Value of Engagement
In the more skeptical America of the post-pandemic reality, families will narrow the circle of resources they trust, but have deeper relationships with those they do. Trust will be the cornerstone of the advisor-client relationship and be based on understanding a family’s goals, challenges, and needs as they arise.
The integration of real-time aggregated data will equip advisors to better understand the needs and pain points of clients—and automatically generate recommendations that answer the question, “What should I do?” before it is even asked. Utilizing that data to instantaneously communicate the impact on their financial plans, suggest next best actions, and provide personalized, relevant educational content amplifies the client experience. Understanding a client’s goals, circumstances, and full financial picture enables advisors to provide personalized, relevant advice that enhances the trust at the center of the advisor/client relationship.
Redefining What It Means to Be Prepared
The COVID-19 pandemic upended many Americans’ fundamental standards for preparedness. All seemed fine, and then, very quickly, it wasn’t.
This situation has understandably caused many families to question their preparedness in a much more profound way. “What if I lose my job?” “What if I get sick?” “Do I have a safety net?” “Will I have enough to retire?” “What if there is another downturn?”
By adopting financial planning as the centerpiece of their practices, advisors can help assure clients they have a path—one that embraces scenario planning and addresses the what-ifs. Good plans can help guide the conversation and next best action—whether it be to make a mid-course adjustment, stay the course, or create a contingency plan. During times of crisis and uncertainty, revisiting a financial plan can help clients feel more in control—and that they are doing something to protect their families and stay on track to achieve their long-term aspirations.
Embracing More “Human” Digital Engagement
Lockdowns have made in-person meetings impossible, removing the distinction between in-person and digital interaction. While online account information in client portals is helpful, the capability for clients to find and obtain personally relevant answers and engage with their advisors via a digital platform, at any time and from any location, will be a “must-have” as opposed to a “nice-to-have.”
Advisors will need to drive the optimal content experience—in the right format, for the right person, at the right time, and with the right information—using hybrid engagement. Advisors will need to build trust virtually, just as they would in person.
Fusing Health & Wealth
The threat of COVID-19 has led many Americans to seek deeper answers to the question, “Will I be okay?” They are asking about estate planning, living wills, senior and long-term care, and other healthcare matters. Advisors will have to work with networks of experts, including attorneys, CPAs, and life insurance professionals, to provide holistic wellness that addresses clients’ health, emotions, and finances.
Understanding a family’s health characteristics and concerns will be just as important as their financial circumstances and concerns when building financial plans. In order to address more areas of a family’s wellbeing, advisors can expand their advice offering with access to credit and insurance products, as well as healthcare and Social Security expertise.
Emphasizing Families & Communities
The renewed focus on family and communities during this time have led to a new mutuality that “we’re all in this together.” Going forward, advisors have an opportunity to take a broader perspective and strengthen their connections within their communities to help improve financial lives at a higher level. For example, advisors can leverage digital and educational tools to enable families in local communities to gain a greater understanding of how to achieve financial wellness.
Writing a New Playbook for a Sustainable Business
When the lockdown began, large businesses tended to fare better than smaller counterparts because they had the technology to make it possible for employees to work from home. Going forward, smaller companies, including wealth management practices, will need to ensure they have secure technology and business continuity plans that can position them to fully operate in the cloud. This digital transformation will deliver scale and a consistent fidelity of advice across all points of engagement.
In the face of economic uncertainty, advisors can utilize a broader network of external partners to do more with less—helping them achieve sustainability through secure, unified technology systems.
Our Industry’s Time to Shine
Financial advisors have performed diligently on behalf of their clients during the COVID-19 pandemic, but they must take steps to ensure that both their clients and practices will be prepared for anything long after the recovery.
This health and safety crisis will eventually end. However, it will leave behind lasting change that will define a new way forward. The wealth management industry has a tremendous opportunity to help lead American families into our “new normal,” and make financial wellness a reality for millions of people.
John Harris, CFP, is Managing Director of Envestnet, Inc., a provider of data, solutions, and technology to the wealth management industry.