The wealth management industry has long recognized the value of financial planning to clients in helping them better align their investments with their goals. Advisors have responded by leaning in and offering a suite of financial planning services. However, what exactly constitutes financial planning and how it is delivered by advisors looks very different across firms. The variances around what comprises these services and how firms decide who it is offered to, has led to challenges pairing the right technology solutions with each firm’s unique financial planning style as well as an array of technology vendors in the marketplace.
Trend 1
The Financial Planning Service Suite Varies Widely Between Mid-sized Wealth Management Firms
Insights and Actionable Intel
- Retirement planning, cash flow analysis, estate planning and tax planning are the most common types of financial planning services offered.
- In addition to variances in what financial planning is, it is often not offered to a firm’s entire client base with only 32% of firms offering to ALL of their clients.
- Take Action: Evaluate the needs of your different client segments and how different financial planning services would benefit them. Solidifying what the service is and who it is for will form the framework for considering the optimal tech solutions.
Trend 2
Advisor Discretion’ Leads List of Reasons Why Firms Do Not Offer All Clients Financial Planning
Insights and Actionable Intel
- More than half of firms leave the decision to offer financial plans to specific clients up to their advisors while the rest use metrics and data related to AUM or client complexity.
- Some firms reported advisors decide to not offer financial planning to clients because it involves changing their business model and may lead to uncomfortable conversations.
- Some firms noted that making advisor adoption of financial planning tools optional was a factor in rollout. When the financial plan decision is left to advisor discretion they choose not to spend the time creating a financial plan.
- Take Action: Firms indicated that they anticipate clients will want financial planning to be a more integral part of the advisory process. Firms need to educate advisors on the value of incorporating financial planning into their work for clients and provide them with the tools to help them communicate that value.
Trend 3
79% of Wealth Management Firms Use Two or More Financial Planning Technology Tools
Insights and Actionable Intel
- A one-size-fits-all financial planning technology solution doesn't exist; therefore, a large majority firms utilize multiple tools depending on the variety of services they offer.
- eMoney and MoneyGuidePro are used significantly more than any other platform.
- Firms say they want more robust integration with other technology, including CRM and portfolio construction.
- Firms indicate they would rather optimize their current platforms than add new ones or replace existing platforms.
- Take Action: Integrations will be critical to maintaining operational efficiency when providing comprehensive financial planning. Tech vendors look to their clients’ needs to determine priorities for integrations and firms that can articulate the value and specifications of integrations should advocate for those enhancements.
Survey Information: The data in this report is pulled from a survey conducted by F2 Strategy in March 2023. The survey includes responses from 37 leading RIA, Wealth Management and Broker/Dealer firms representing $6 trillion in assets.
