The second component of speed is around designing a financial planning process that puts the conclusions first and the critical variables that influence that result mathematically right next to the conclusions. This is important because the conclusions of a financial plan, whether somebody is under-saved, underinsured, or under-invested, will likely inspire some form of client action and reallocation of capital.
That conclusion on financial action is what people are seeking to get confidence around making a decision. If we do not understand or cannot agree on the variables and underlying assumptions of that math, because they are hidden or not easy enough to alter, we do not get a collective agreement that the conclusion is actually legitimate. So, the key to financial planning and speed is to make sure that it is a negotiated agreement on the assumptions and what to do about it by having transparency around the few levers we might actually be able to influence including return expectations, mortality, and spending to name a few. Making it easier to agree on the assumptions is the key to technical credibility in the forecasting process and speed to conclusion.
Hortz: How does providing a visual platform for efficiently organizing client finances AND relationships in one place also help advisors?
Holt: Every professional advisor has a standard of Know Your Client (KYC) regardless of regulatory or suitability requirements. Over the years, many financial professionals have kept notes on understanding their clients on a yellow pad or an organizer, yet only the required data needed to open accounts or do financial planning made it into a scalable practice management solution like CRM. This has left a huge data hole in most practices and the bulk of the real client management, rather relationship, remains inside the head of advisors.
I think the real strategic value of capturing all household data in a system is twofold - firm collaboration and simple rich communication. So where is this going? I hope you are asking yourself what are the highest-end advisors providing today to the ultra-wealthy that most mass-market advisors are not?
Two things come to mind: Proactive expert collaboration across disciplines on behalf of their clients and simple-rich communication that saves everyone time in the decision process. That requires a highly technical representation of relationships and yet a consumable output by the least sophisticated (or interested). An experience that can put the eyes of an investment advisor, insurance professional, attorney, estate counsel, and financial planner literally on the same page for the benefit of their collective client’s household.
Putting it all together — that is what Asset-Map really does at its core — provides a single, visual, financial picture that multiple professionals can immediately interpret and collaborate around based on their unique skill and experience in order to identify actions needed right now. Enabling the financial firm of the future to collaborate internally and with clients will necessitate getting household data into a singular sharable platform and will prove to be one of the highest and best revenue-producing activities in practices to come.
Hortz: Besides the technology, you developed a highly customizable client engagement process that advisors can follow. What are the benefits of that kind of communication style?
Holt: The honest truth is that we approached Asset-Map from the most basic of needs of the advisor to understand the clients’ situation and quickly assess where they need to take the conversation based upon what the advisors interpreted. There were many times when we just said, “Can I just see all the facts on one page?” and once we saw those facts, we asked ourselves, “Can I just see if we're on track for major goals on one page?”
The reason is because that is the most empathetic approach to what the core challenge is in financial planning. It is taking a very complex, interconnected, and intertwined set of problems and trying to make a decision about what actions to take (or not take) based upon different data, competing needs, capital scarcity, and the risk of being wrong. The challenge of making financial planning decisions is already complicated enough; a financial planning solution should not be equally as complicated.
Traditional financial planning and engagement tools tend to focus on the mathematical calculation engines that show capital over time. However, we know from experience in the field advising real humans that this is not actually where professionals add their value. Where they add value is in the confidence they provide to their clients, which is evident by their competence revealed by their willingness to ask good questions, educate, and help make more sound decisions.
Understanding this nuance is why Asset-Map has achieved such explosive adoption. Once advisors see Asset-Map and what we can do, they most often respond with, “Thank you — this is the way I think” or “I've been doing the same thing on a yellow pad for years.”
Hortz: Any other thoughts or points you would like to share with advisors on why they should be positioning themselves around this theme of the speed of advice?
Holt: I’ll answer that with what clients of advice really want to say to their professionals: “No one has time to read your thoughtfully technical 40-page report. You are lucky if I get past page two of my statements. I am sure they are all very interesting for you — congratulations. Now tell me what they mean and what we should be doing in my interests right now. I have ten other things that are priorities today and instead of putting myself last (like I tend to do), I am hiring a financial advisor to help me make better decisions, execute them, and occasionally bring relevant ideas to my table without me having to ask or waiting a year until our review meeting. I want someone who understands me, my family, all my financial decisions and is willing to be on my team for the whole household. My critical need is to communicate clearly and effectively with me and those that are important to me at our collective “level” of financial skill. Can you do that?”
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The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation, and unique client/community engagement strategies. The institute was launched with the support and foresight of our founding sponsors — NASDAQ, Ultimus Fund Solutions, Pershing, Fidelity, Voya Financial, and Charter Financial Publishing (publisher of Financial Advisor magazine).