Reality Check
Diving deeper, however, we see profound gaps between the services that financial advisors believe they’re offering and what investors perceive they’re getting. These discrepancies highlight the urgent need for advisors to develop better communication strategies while ensuring that their offerings are aligned with client expectations and needs.
In addition to asking affluent clients of advisors which services they desired, we also asked them to tell us which of the services they actually receive from those advisors.
The results—summarized in the chart below—reveal often-wide chasms between perception and reality. For example:
• While (as noted above) 89.2% of clients want adept tax planning services, just 24.8% of those clients reported that they receive these solutions from their advisors.
• Only 22.5% of clients confirm receiving estate planning services—despite the fact that 91.1% of them said they want help with estate planning.
• Although 87.3% of clients want charitable planning guidance from their advisors, a mere 6.0% report receiving these benefits.
• Nearly three-quarter of clients (73.8%) expect robust strategies to shield their wealth. The percentage of clients who say they’re actually getting those strategies: 7.5%.
Shockingly, there’s even a significant gap in the category of investment management—which could reasonably be assumed to be a core component of every advisor’s offering. While 92.1% of wealthy clients seek investment management strategies, only 72.1% of clients confirm getting them.
Clearly, there are enormous opportunities for advisors to ramp up their efforts to meet their affluent clientele’s high expectations. In some cases, this might mean providing services clients want but aren’t actually getting. In other instances, advisors may need to better communicate to clients the services they’re receiving and the value that is created from those services.
Bridging The Gaps
We see the virtual family office business model as the key to bridging these gaps. VFOs mirror the approach of single-family offices long used by the world’s wealthiest people by providing services and specialized expertise that were once reserved exclusively for the upper echelons of wealth. As such, they bring single-family office capabilities to a wider group of affluent investors and families.
VFOs are characterized by their robust networks of professionals working in concert on clients’ needs. Through collaboration with high-caliber professionals, VFOs enable advisors to widen the range of services or advice they can offer clients—and the professionals can refer the advisors to their networks in return.
The upshot: A high-performing VFO is capable of optimizing clients’ financial world by addressing their core financial matters and the many (and varied) non-financial wishes and concerns that are tied to those financial components. Because VFOs encompass wealth management, administrative services, lifestyle services and special projects, they can be extraordinarily valuable to clients with complex financial lives—and enable advisors to deliver the services those clients want most.
George Walper and Catherine McBreen, managing principals at CEG Insights, leverage their extensive industry experience to drive organic growth and excellence in wealth management. Dive into our exclusive insights and strategies with our latest "Play to Win" Report. Unlock Your Path to Success – Download Now!