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Financial Planning for the Modern Client: 5 Keys to a Successful Relationship

Financial planning relationships have changed a lot over time.  In the past, an investor would contact a broker (or be cold called by one) and place a trade in return for a commission.  Sometimes they may not even speak with the same broker again. While these types of relationships still exist there has been a major shift away from this model to a much more holistic approach. Advisers spend much more time learning about their clients and providing advice based on this knowledge.  But the modern client is beginning to demand even more from their advisers. It’s not just about creating a financial plan and meeting a couple times a year anymore.  The modern client is looking for something much more integrated with their lives and aligned with their ever changing goals.

Advancements in technology over the past decade have changed the way advice is delivered, clients are communicated with and how financial planning practices operate.  In the beginning, these improvements were an extra value add for the client.  This, however, has evolved, especially for the modern client.  The use of technology is now an expectation and not just a value in itself. The way the technology is utilized and how advisers use it to simplify their clients’ lives is the real way value is added.

So what is the modern client looking for from their financial planning relationships?

  1. Simplicity: In a fast paced world, modern clients are looking for ways to simplify various aspects of their life. This is where the use of technology is essential to streamline the client experience and remove roadblocks from the process.  This stretches across all aspects of the relationship:
    • Communication: Clients want to easily be able to communicate and share information securely with their adviser. Be it through emails, video calls, client portals or other online document sharing systems, clients want to communicate with their adviser on their terms in the easiest way possible. It is not just about the quarterly or semi-annual meeting anymore.
    • Access: Clients want to be able to access their information and accounts simply, securely and easily from anywhere. It doesn’t have to be a granular deep dive but they want to be able to see what is going on when they want to.
    • Processes: Opening accounts and performing other routine tasks shouldn’t be a laborious process. Clients don’t want to spend all their time dealing with getting things done, they just want them to get done.
  2. Expertise: While technology has made many processes and advice much easier to obtain, the modern client still wants a level of expertise from someone that knows and understands their situation.  Robo-advisors have been able to replace some of this advice for certain clients but wealthy clients still desire to work with someone that understands the human side of their situation.  Client needs can’t all be boiled down to simple algorithms so the modern client still wants a level of expertise that goes beyond simple investment planning and model portfolios.
  3. Value: With technological advances, certain advice has become much easier to obtain and at a much cheaper cost. This has forced a lengthy discussion about the cost of financial advice in the industry. However, what I have found is the modern client isn’t as worried about overall cost as they are about value. Clients do not mind paying a fee when the value they are receiving in return exceeds that cost. While it is expected that fees will have to come down over time, we are also seeing an increased value being provided by advisors and desired by clients.
  4. Time: Or better put, the modern client is looking for time savings. They do not want dealing with their finances to be a time consuming burden. They want to be able to outsource the time consuming aspects of managing their finances so they can focus on more important things in life.
  5. Education: While the modern client is looking to simplify the financial parts of their life they are also looking to be informed about what is going on. They like to understand the whys behind various financial decisions or advice. They are not necessarily looking for a deep dive into every position they own but they like to have a basic understanding of what is going on and why. Part of this stems from the true desire to understand while a large part stems from the scars left by the last financial crisis and the perceived mistrust of the financial industry as a whole.  They don’t want to just take all advice at face value anymore.

While not all modern clients embrace all of these areas and there are many other things individual clients are looking for. The main thing I see from the modern client is a shift in expectations of their relationship away from what has been traditionally provided by a broker to a relationship that is more integrated into their lives.  Barriers of communication and access to information have been broken down by technology and the modern client isn’t just looking for this, they are expecting it.