In the very recent past, whenever someone would ask me about the future of the financial planning service model, I had a ready list of what I thought were astute responses. First and most importantly, I would say, is the development of a truly collaborative, life-centered onboarding model where the advisor helps the client uncover what he or she really, truly wants out of life, and then the two work together on a plan to achieve whatever comes out of that conversation. You know it’s collaborative when clients are startled to discover life goals they had buried or forgotten about, and when you let them take the mouse when negotiating the life trajectory embodied in their financial plan.
From there, I envisioned the advisor of the future prompting clients to identify short- and intermediate-term goals, which could be financial, or things like taking a European vacation two years from now, or even as simple as scaling back work time so that the client could get in the consistent habit of having breakfast and dinner with the family. These goals would be listed in the CRM (I envision 30 of them at any given time), and would be replenished as goals are achieved. In that future day, every financial planning client would be consistently achieving their own life goals—and this would mean that the original goals would be repeatedly reset to something more ambitious over the life of the relationship.
The performance statement of the future, as I envisioned it, would be a list of important personal and financial goals set and achieved this quarter, this year, and since inception. That is a MUCH more important and relevant performance indicator than tracking the portfolio against the markets.
It seems a bit redundant now, but I also envisioned clients meeting more regularly, for shorter periods of time, with their advisors over Zoom, Google Chat or some other face-to-screen system. And those quick meetings would be driven more by the client than by the advisor scheduling a once or twice a year sit-down.
Finally, I envisioned that advisors would provide more cash flow planning, helping clients get set up on Mint or some other platform, or just using the online reporting for their credit card and banking statements, consolidating their spending habits, and then helping redirect careless spending toward focused long-term goals. This service would be especially valuable to younger, less-wealthy clients in the early years of building their net worth.
Is that all? No longer. I recently attended an Insider’s Forum virtual session hosted by Matt Sonnen, whose COO Roundtable podcast is highly influential in the operations community. (You can find it here: https://pfiadvisors.com/coo-roundtable/.) Sonnen recreated a podcast for us, interviewing Kaylyn Melia, chief operating officer of Socius Family Office and Karen Denise, senior director in charge of client service at CAPTRUST. Their conversation touched on some services that advisors today are not providing, but which I believe they will routinely provide at some point in the fairly near future.
Such as? The firm tracks liabilities and assets for each client and produces a detailed balance sheet and statement of cash flows—not just when the initial financial plan is produced, but on a monthly basis. The firm accepts custody of client assets; meaning that it sets up a limited power of attorney on client bank accounts, so that its team can take in their mail, track their income and pay their bills if they so wish. This would also allow the firm to adjust portfolio allocations on client corporate retirement accounts.
From that presentation, I can envision advisors of the (near) future setting up banking relationships, negotiating the purchase of homes and automobiles and any loan arrangements associated with them, and playing the role of purchasing agent and good consumer for major expenditures in the marketplace.
My sense is that the more services an advisory firm offers to navigate through complex and sometimes predatory aspects of our economic system, the more valuable that firm will be to its clients—and the more grateful its clients will be, and the more times the firm will be referred to other prospects and consumers.
This future service model might seem far away to us now, but my sense is that the marketplace—on the consumer and advisor side—is evolving much faster than it ever has before.
If I were you, reading this, I would take a hard look at how your firm could create this service structure for your own clients, and have it completed within five years, ten at the most.