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Advisors have a lot on their plates. There’s the race to bolster technology. Then there’s the need to ensure the products and services are in place to address the great wealth transfer and other retirement-related issues.
What’s mentioned above is a mere smattering of the various individual issues need to address to ensure their practices are prepared for the future. When combined, adding new and improving existing services are part of the holistic practice conversation – one that many advisors are having.
As it pertains to the advisory business, “holistic” is a word frequently used, perhaps overused, but it’s highly relevant when working with clients of all stripes. Put simply, clients want access and convenience. Translation: they want multiple services, including estate planning and taxes, under one roof. Advisors that can evolve with the holistic trend could be poised for success while those that stay stuck in neutral risk client attrition.
Tips for Going Holistic
Envestnet’s 2024 Advisor Perspectives Survey highlights the importance of practices going holistic.
“Advisors view the expansion of service models (e.g., tax, estate, 401(k) planning) as the most underappreciated opportunity in the industry. And clients agree: McKinsey found that nearly half of all wealth clients prefer to work with an investment professional that can holistically address financial needs across investments, taxes, banking, and life insurance,” according to the research firm.
Advisors realize that going holistic means adding more services, but there are avenues to reduce the time commitment on that front, including model portfolios and increasing operations staff. As Envestnet observes, bolstering holistic credentials doesn’t require an advisor to become an expert in everything, but it the move can be enhanced through third-party partnerships and bolt-on mergers and acquisitions.
Not surprisingly, artificial intelligence (AI) is a prime avenue through which advisors can improve a practice’s holistic resume, but what is surprising is that many advisors haven’t gotten there as of yet. Envest points out that of 228 open-ended responses from advisors surveyed, just 22 mentioned leveraging AI as an inroad to going holistic. That implies that advisors that are quick to adopt AI today could reap the rewards over the long-term.
What Clients Want
Of course, going holistic is about meeting and exceeding clients’ demands and expectations. That is to say the most successful transitions to holistic are the ones that prioritize the client from the start and that means knowing what clients want. There are also specifics applicable to coveted younger clients and prospects.
“Serving younger investors is moving from a talking point to a focal point, with 36% of advisors planning to add tools and advice for this segment within the next two years. Adoption of modern client portals and mobile apps will be necessary to engage these young, digitally native clients,” according to Envestnet.
In terms of services surveyed advisors identified as critical, some said increased links between financial and overall wellness are important to clients while others noted clients want more family office-style services. Other advisors said clients are looking for more 401(k) advice and some want to see increased emphasis on estate planning and tax preparation.
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