Understandably, the industry is responding by exploring and implementing new advice and service models to meet evolving investor expectations.
Broadening scope of advice and services
In response to changing investor views on advice and service, the industry is shifting from a product-led business to one that focuses on holistic advice, financial planning and related services. Firms are broadening the scope of wealth management advice and services they offer to include traditional financial planning support activities such as credit, estate, trust and tax advisory support. To do this, many firms are integrating banking, insurance and other specialists to improve their overall value proposition. Some firms in the U.S are even going further and seeking to blend wealth and health, recognizing the impact financial wellness can have in enriching the lives of investors.
This relationship-oriented model enables a more holistic experience that supports an investor’s (or family’s) financial goals and objectives – and ideally, their lifestyle – in which investment portfolios are now only one piece of the puzzle. For some firms, this shift started several years ago, but it is now expanding to the broader market.
Correspondingly, the focus on individual accounts has also started to change to a greater focus on planning for the “household”, and in some cases, the extended, multi-generational family. Increasingly, clients are being viewed as people, not just a bundle of accounts and assets.
In shifting to broader financial planning and relationship-oriented business models, many firms are breaking down the traditional business silos of investments, banking and insurance, with a view to optimizing efficiencies, the client experience, and enabling investors to interact through a single point of contact.
“The industry is starting to shift from a product to an advice business. The overlay of the financial plan and related services will be at the crux of the business model in the future.”
– Consultation interviewee