Financial Advisors

Client Life Management: Engagement as Business Alpha

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Looking across the industry, there is a growing movement of advisors wanting to differentiate themselves by employing a more holistic, private wealth or family office business structure that deeply embeds their services into the client's financial, family, business and aspirational life. It represents a shift in business management mindset to focus firm goals towards more comprehensive client engagement and investing financially, culturally and strategically in client experience. The need for this more encompassing business model of “Client Life Management” is backed by consumer studies like Accenture’s Wealth Management: The New State of Advice which reports on the rise of newly engaged investors with growing financial advice needs and expectations.

Technology plays a major role in actualizing this more comprehensive servicing and engagement strategy. Digital Vaults, as an example, can transform financial firms into delivering these modern, high-touch wealth and advisory relationships. They enable financial information, data and documents to converge in your firm as a single source, ultimately providing better insights, deeper engagement and more value across all stakeholders and family members in the client relationship.

To better explore the Client Life Management business model and the technology behind this modern movement, we reached out to Institute members Daniel Kenny, Chief Executive Officer, and Kristian Borghesan, Chief Marketing Officer, of FutureVault – an industry leader in digital vault and secure document exchange solutions and pioneers of the Client Life Management Vault. Having developed their digital vault technology platform into a best-of-breed solution for the wealth management industry, we asked questions to better understand how they developed their technology to power a more engaging advisor business model for heightened competitive advantage.

Hortz: How would you define Client Life Management and its range of services?

Kenny: Client Life Management is emerging as a new category within wealth management, representing a new paradigm in the way everyday client information, data and critical documents are managed, accessed, shared and advisor services are delivered.

Managed through digital vaults, this more encompassing wealth management offering drives deeper engagement and results in more value being delivered to clients by extending the value proposition outside of the traditional confines of wealth management to a more comprehensive service model that embodies the key areas of the client’s life and household dynamics.

Borghesan: At the core of Client Life Management is the aggregation of data, information and documents that span across a client’s personal, financial and business life. It offers a powerful driving force empowering firms and advisors to now confidently center themselves in their clients’ lives through their advisory relationship with them — from prospecting, onboarding and engaging all aspects of a client’s financial, business and personal life to wealth transfer strategies, legacy planning and more.

Hortz: You wrote recently that you saw enhanced client engagement as the new alpha for advisors and advisory firms. Can you explain your perspective on this?

Borghesan: According to the recent WealthStack Study along with findings from Franklin Templeton, investing in technology to deliver a unique digital client experience and drive client engagement will pave the road to success for the modern advisory relationship. 

As we take a quick horizon scan across the financial marketplace and look at what the most recent trends have been telling us, it is evident and clear, now more than ever, that firms and institutions taking this road and seriously investing in client engagement will undoubtedly come out on top. 

Kenny: Our view is quite simple. The firms and advisors that “get the closest” to their clients by virtue of understanding all areas of their lives, will be the ones that naturally end up winning the hearts, minds and wallets of clients and families, for generations to come.

Hortz: What role do you see that digital vaults play in enhancing client engagement?

Kenny: Digital Vaults are the ultimate linchpin when it comes to Client Life Management and creating a multi-generational strategy. They are far more than a secure platform for document handling and exchanges to take place. Digital Vaults are really about the information, data and documents inside of them; all of which are used to empower and drive deeper discussions and needed actions between firms, advisors and their clients.

Borghesan: Here at FutureVault, we are designing our technology towards how a secure digital vault serves as the single source of truth for the client’s life from onboarding and planning through to ongoing processes that revolve around information, data and documents. By having everything centralized in one spot, everyone wins. The home office and compliance teams win, advisors win, and, most importantly, clients and their family members win.

Hortz: How can the Client Life Management approach create client family loyalty and stickiness across generations? Can it help position an advisor to win the Great Wealth Transfer ahead of us? 

Borghesan: Let us look at the stats here for what we know to be true. We know that more than 70% of heirs to wealth are likely to fire or change financial advisors after inheriting their parents’ wealth, per Cerulli Associates research. Simply put, this cannot be glossed over or kicked down the road for months.

But there is a silver lining here. This impending challenge presents a real opportunity for institutions, firms and advisors to gear up to demonstrate their value and cement trust across generations. 

Kenny: This is precisely where Client Life Management and Digital Vaults play a material role. One of the most effective ways firms and advisors can execute and maintain a multi-generational strategy is by implementing a Client Life Management Vault for family legacy information, data and documents.

A well-structured digital vault serves as a central repository for all the important documents and information that clients and their families need to access to develop wealth transfer strategies or in the event of a change in circumstances, such as the passing of a family member, liquidity events or the retirement of an advisor. 

Having everything centralized in one place is not only a huge time-saving benefit for clients and their next generation, but it is also of massive value for institutions and high-touch advisory professionals.

Hortz: How else did you build and design your digital vault tech platform to address enabling a holistic Client Life Management business model and empower advisors to be more competitive?

Borghesan: This ultimately boils down to a few key principles. The first is understanding the role of an advisor and the various types of interactions that are driven by data, information and documents when working with clients, especially High Net Worth (HNW) and Ultra High Net Worth (UHNW) families. Our platform equips the modern firm and advisor with the right tools to securely request, collect and exchange critical documents from clients, family members and their network of Trusted Advisors. With automation capabilities, we are also able to streamline the automated delivery of custodial and portfolio-related documents.

The second is understanding client needs and expectations when working with firms and advisors, with respect to data, information and documents. Clients expect best-in-class security to protect their data and information and that becomes table stakes for any financial advisory business. Clients expect and assume, that advisors are always meeting their regulatory requirements; this goes hand-in-hand when working with technology companies. And importantly, clients expect a digital-first experience and interaction where their information, data and documents are readily available to them, on the go, 24-7.

Kenny: Another key principle ultimately comes down to evolution of the role of the modern advisor. As more and more firms lean toward a family office or white-glove approach with highly personalized services, especially with HNW and UHNW families, the primary financial advisor is slowly emerging as the family’s most trusted advisor in their life. This has steadily paved the way for additional services and information being managed by the advisor and by the firm.  

Last, but not least, the data and the information within the documents are what ultimately drives the engagement and tells the client’s story. We built data extraction capabilities to feed into internal systems and leverage actionable insights; supporting institutions and firms looking to take their value proposition and the way they are managing client information to the next level.

Hortz: What recommendations can you share with advisors on how Client Life Management can provide a competitive value proposition?

Borghesan: Client Life Management positions the modern advisor to thrive by being relevant and instrumental through the entire relationship with a client - from onboarding and engaging all aspects of a client’s financial, business and personal life to wealth transfer strategies, legacy planning and establishing their children with structured holistic financial plans of their own.

This level of value and engagement adds a competitive business alpha — a digital moat strategy — to your firm where you can engender more trust, access additional family members or centers of influence and develop a highly referable business. It is really about creating an environment where you are building loyalty across a family, across generations.

Kenny: We will undoubtedly see Digital Vaults continuing to emerge as a must-have piece of the modern advisor’s tech stack and continuing to play an incredibly important role in bringing all areas of the client’s life together and centralized in one spot, for everyone.

Access to information from every level - head office, advisor, client and family members -  can and will ultimately drive the modern relationship in a world where the advisor’s role continues to change. Positioning yourself at the center of your client relationships, by virtue of having access to their information, data and documents, will ensure that you and your clients work together, in harmony, from a trusted position.

The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We operate as a business innovation platform and educational resource with FinTech and financial services firm members to openly share their unique perspectives and activities. The goal is to build awareness and stimulate open thought leadership discussions on new or evolving industry approaches and thinking to facilitate next-generation growth, differentiation, and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors — Ultimus Fund Solutions, NASDAQ, FLX Networks, TIFIN, Advisorpedia, Pershing, Fidelity, Voya Financial, and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines). 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Bill Hortz

Bill Hortz is an independent business consultant and Founder/Dean of the Institute for Innovation Development- a financial services business innovation platform and network. With over 30 years of experience in the financial services industry including expertise in sales/marketing/branding of asset management firms, as well as, creatively restructuring and developing internal/external sales and strategic account departments for 5 major financial firms, including OppenheimerFunds, Neuberger&Berman and Templeton Funds Distributors. His wide ranging experiences have led Bill to a strong belief, passion and advocation for strategic thinking, innovation creation and strategic account management as the nexus of business skills needed to address a business environment challenged by an accelerating rate of change.

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