What if I told you that your firm's biggest competitive edge isn't just your expertise—but your ability to make wealth management easier for clients? Today, clients aren't looking for more complexity—they want simplicity, integration, and a seamless experience. That's precisely what we're going to discuss today.
In my first book, You've Been Framed (which is fast approaching its 10th anniversary in print), I outline in detail the five steps you need to undertake to reframe your business effectively:
It is step four of this process, however, which requires the most significant strategic planning time commitment and inevitably proves to be the most labor intensive. Translating client needs and desires into a refocused and reframed business model requires adjustments to your service offering and the composition of your technology and your team. As the needs of current and future clients evolve, it's essential to reframe what your firm does.
KEY ADJUSTMENTS/ACTIONS YOUR COMPETITORS ARE UNDERTAKING
Today, fewer and fewer advisors focus predominantly on portfolio management. In fact, many now outsource the lion's share of day-to-day money management operations – opting instead to devote more time to financial planning initiatives, relationship management, and business development.
They view themselves as stewards of their client's wealth – emphasizing more extensive planning capabilities (including financial, tax, trust, and estate, as well as philanthropic planning) while striving to address more holistic financial challenges and provide more concierge-type services. In reframing wealth management, these firms are:
Becoming the client's wealth facilitator (the root of that word 'FACILE' meaning easy and conveying the desire to simplify your clients' lives) – by vetting and aligning trusted estate attorneys, tax professionals, bankers, and trust specialists who are willing to engage in much of the heavy lifting to deliver a total solution.
One part financial planner, one part tax consultant, and one part financial coach, these advisors are evolving to meet a higher bar of client expectations.
EMBRACING NEW EFFICIENT TECHNOLOGIES
Much like CRM, portfolio management software and sophisticated planning tools have helped advisors take tremendous strides in freeing up capacity and improving the overall client experience over the past two decades; new technologies like social media, on-demand video, and AI are becoming more widely embraced, adopted, and integrated.
Firms are investing significantly in digital engagement tools to enable their advisors to connect with clients more frequently and on their own terms. Even wirehouses (traditionally lagging behind RIAs in adopting new technology due to large organization compliance challenges) aggressively encourage their FAs to engage in video and social media promotion.
RIAs who heavily rely on digital tools and workflows spend 25% less time
on operations and 10% more time on service per client.
To remain competitive, investing in technology that enhances the client experience and streamlines collaboration (within the firm, with the client, and with other professional service providers) will be essential. However, the strong correlation between higher technology spending and growth rates should make the investment significantly more palatable.
Firms that embrace digital transformation will position themselves to thrive as our industry evolves. Keep in mind that when you invest in cutting-edge technology, you enhance advisor productivity and position your firm in the minds of prospective advisors considering joining your organization as a forward-thinking firm capable of meeting their clients' evolving needs.
REALIGNING PEOPLE STRATEGIES
As noted in the Schwab 2024 RIA Benchmarking Study, over the next five years, the average RIA firm will need to hire for four new roles (while top-performing firms will, on average, add seven new roles). As a result, more and more firms are devoting greater time, attention, and resources to talent retention and addressing current and future talent gaps. The Schwab study notes that:
Whether you're striving to build expertise in serving a particular professional niche or audience segment (e.g., women executives) or looking to become the go-to resource for individuals with specific wealth management needs, such as implementing trust structures to facilitate tax-efficient wealth transfer, far and away your team members will be your most important asset.
The best firms commit to creating a cycle of opportunity to attract and retain top talent, ensuring their ability to deliver top-flight service to existing clients and safeguarding the continuity of the organization's people, culture, and values. Providing competitive compensation, a pathway to achieving valuable technical designations, and actively training future leaders to grow the business are all key ways elite advisors attract and cultivate top-tier advisor talent.
Elite firms are also turning their attention towards the next generation of future inheritors of their clients' wealth – undertaking a range of initiatives to strengthen those relationships. From training senior advisors on ways to better engage and build bridges towards next-generation clients to hiring younger Millennial advisors to help strengthen personal connections and bonds to adult children who "don't want to work with mom and dad's advisor."
THE BOTTOM LINE
You've worked incredibly hard to build a successful business – evolving and adapting to changing markets, shifting regulatory requirements, and ever-increasing client demands. However, as clients come to expect more and more sophisticated capabilities and expertise, you'll need to adjust your business strategy if you hope to maintain and/or improve your current profitability.
The right strategy, service model, tech stack, and team will determine your success. The firms that take action today will be the ones leading tomorrow.
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About ClientWise LLC
ClientWise is the premier business and executive coaching firm working exclusively with financial professionals. We specialize in helping clients optimize growth and maximize revenue by engaging as a knowledgeable partner in accomplishing specific and significant business results. Our full-service coaching program empowers financial advisors, wholesalers, managers and executives to enhance performance through customized, action-oriented solutions based on each client’s specific vision and situation.
Our certified coaches are members of the International Coach Federation (ICF). They adhere to ICF’s strict code of ethics and have the experience and insight to work with you on the unique challenges and opportunities you face each day.
Drawing from an in-depth knowledge of the financial industry, ClientWise’s mission is to professionally develop industry leaders and consistently raise the bar for industry service, commitment and integrity. Simply put, our singular focus is to help you get clear, get focused, and get results.