Changing expectations of wealth management clients

Posted on Posted in Financial Planning

This excerpt comes from an Accenture publication under the sub-title “Changes in client expectations”, annotated by me:
In an earlier time, the client/advisor relationship was based on the advisor’s near-monopoly on financial information (as when I started in the industry for Drexel Burnham in the early 1980s). “Do it yourself” options for portfolio management and securities trading simply did not exist. Now, firms such as Schwab,
Fidelity, TD Waterhouse and many others (Vanguard in our Philadelphia market)
have added multiple capabilities to help clients direct their own course, including
fairly sophisticated planning tools and even risk metrics, providing less expensive alternatives to a full-service relationship. Players have also made
products more available through various forums—clients must no longer rely on
advisors for access to private placements, new issues and other vehicles.

While clients’ knowledge and sophistication about financial products
is increasing, clients—conditioned by their experiences outside the wealth
management industry—have also grown to expect 24/7 access to advice and
service along with tailored interactions and solutions (advisers on call). In the past, direct channels were designed for lower asset classes.
Now, as clients graduate to higher wealth tiers, some are realizing that they prefer
to remain served through direct channels. Firms wishing to offer a distinct value
proposition are now equipping advisors with fully mobile, interactive, integrated
proposal tools incorporating scenario based planning (modular approach as opposed to comprehensive planning promoted by CFPs). Mostly clients are looking
for control and to diversify the sources of investment advice, as well as lower
the overall cost of that advice. There is a large segment of clients that will look to
advisors for that advice, but they will do so equipped with more information and
less loyalty (resistance to ongoing asset-based management contracts).

(This report directly supports the modular fee-for-service model developed for wealthmanangement.us.com).

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