Why a holistic approach is the future for advisers and wealth managers
The wealth industry is changing. There’s no doubt about that. According to the recent
The wealth industry is changing. There’s no doubt about that. According to the recent Wealth and Asset Management 4.0 study, firms now expect up to three-quarters of their interactions with clients to be conducted digitally within two years, whilst 40% of investors themselves view being granted digital access to services as a priority going forward.
But what does this mean for the client-adviser relationship? How can financial planning and wealth management firms adapt to this rapidly shifting marketplace?
Our research suggests the key to success lies with embracing the added value that advisers are uniquely placed to provide – namely, a holistic approach to helping clients achieve their overall life goals and sustained financial health.
First, let’s explore the market trends driving this need.
We already know that a significant minority (around 39%) of investors look to their chosen firms for goal-based financial advice. And the data suggests this will rise within the foreseeable future, with the industry anticipating a roughly 10% increase in demand for retirement, next-generation succession and real-estate investment planning advice over the next two years.
As a result, the evidence indicates firms that widen their portfolio of products – and thereby offer more choice to clients – are well positioned to outperform those that don’t in years to come.
Financial planning is currently seeing the most rewards from digital investment, with over one-third of firms reporting a high ROI during the 2021 study.
And that’s no surprise given the growing expectation among investors for more personalisation. Firms should leverage advancements in digitisation to offer a more bespoke journey.
Put simply, this means offering a greater number of solutions while also ensuring it’s provided via channels that are convenient for them. For example, a massive 89% of investors have singled out mobile apps as the channel set to become their preferred medium of interaction over the next two years.
While the rise of hybrid human-digital advice solutions allows firms to widen their offering and reach new markets, the benefits of a strong client-adviser relationship are still apparent.
The demand for a more holistic product and service offering means a personalised approach is needed – moving away from static demographic details that might consign a consumer to the ‘mass-affluent’ or ‘UHNW’ box. After all, an individual’s needs vary throughout their life – so the more we can ask ‘where are they in their journey?’ rather than ‘who are they on paper?’, the more nuanced and high quality the final advice will be.
And that’s not all. Approaching the advice process in this way – where each individual is a moving target with evolving needs – will also encourage more robust fact finding as advisers will be less tempted to bring pre-determined ideas to the table based on demographic data or stereotypes.
Instead, the onus will be on firms to offer the widest possible set of options alongside personalised advice, ultimately empowering clients to make an informed choice that fits their situation.
Knowing why a holistic approach is so important, let’s look at what you need to get there.
Optimised client outcomes will need a more profound cultural shift in the way firms approach the advice process and client relationships. And it will inevitably take a clear and focused culture strategy to make this approach stick in the long run.
That’s why it’s so important that senior management leads by example and champions a people-focused, purpose-led business strategy motivated by achieving the best possible outcomes for clients.