Advisers Moving to a Client-Centric Model

Advisers are using new planning models and smarter technology, including automation, so that they can offer personalized service, SEI finds.

Financial advisers are using new client-centric technologies and processes that can increase transparency, create more value and help clients become more actively involved in financial planning, according to a new report from SEI Advisor Network and co-authored by Spenser Segal, CEO of ActiFi, a financial services software development company.

What is driving this movement to a client-centric world and more personalized advice are the fiduciary movement, robo advisers and a changing consumer dynamic, SEI says. The report recommends that advisers use a customized planning approach that is facilitated through technology to best fit each client’s goals and cash flow needs. This means using a variety of planning models, including project-based, modular, holistic and segmented, SEI says.

“Many financial planning approaches exist today, and the days of delivering only holistic advice to clients are gone,” says John Anderson, managing director and head of practice management solutions at SEI Advisor Network. “This report shows how an advisory firm can mechanize financial planning procedures with repeatable processes and the latest technology, but still deliver customized advice to their clients. Each client brings a distinct set of goals, needs and expectations to the table, and advisers can show value over time through more personalized planning.”

SEI surveyed 542 advisers and found that only 41% view financial planning as their core value proposition. Twenty-four percent said the biggest challenge they face is explaining the value of planning to prospects and clients. Twenty-six percent said that finding the right technology to effectively collaborate with their clients is difficult.

“In this era of intense competition, fee compression and increased regulatory scrutiny, advisers must become more efficient and do more for their clients, with less,” Anderson says. “Technologies are pivotal, but advisers need to balance ‘high tech’ with ‘high touch’ to add capacity and value. While automating elements of the co-planning process is key, the human component remains central to the advice management experience.”

SEI recommends that advisory practices focus on three business elements equally: people (i.e. clients and staff), process and technology. In order to illustrate the value of implementing a people, process and technology model, SEI Advisor Network partnered with ActiFi to track the performance of 46 financial advisory firms from September 2015 to December 2017 to learn how systemizing routine tasks affected their businesses.

The survey found that advisers who automated repeatable processes were able to spend more time engaging with their clients. Before the program, 70% of the advisers said they did not have enough time for client-related activities. After the automation program, there was a 41% decrease in the number of firms that felt this way. They also saw a 66% increase in the number of clients receiving financial planning services.

The white paper, “The Next Wave of Advice Management,” can be downloaded from here.