The family office has traditionally been the preserve of ultra-high-net-worth individuals. It offers an all-encompassing solution to managing the complex financial and investment needs of affluent individuals or families. These firms, whether single or multi-family offices, often tend to their clients’ every need, transcending the typical advisor-client relationship.
As technology has advanced and the world has become more interconnected, complex financial assets once exclusive to the UHNW are now within reach of the mass affluent. This democratization of finance —driven by digital platforms, fractional investing, and increased financial literacy —has reshaped the investment landscape. Consequently, wealth managers and financial advisors face a critical choice: evolve their services to meet clients’ expanding needs and provide clarity in an increasingly complex financial world, or risk losing those clients to more adaptive competitors. The challenge lies in broadening expertise, leveraging technology and offering personalized guidance to navigate this new terrain effectively.
Clients increasingly expect white-glove concierge services from their advisors. The most effective family office advisors act as conductors, orchestrating and coordinating the various specialists to benefit the end client. To capture and retain these emerging investors with increasingly complex financial needs, advisors should focus on three key areas:
- Digital access. As technology advances, Americans increasingly expect instant access to nearly everything, including their finances. This means offering personalized digital access to investments and planning documents — a trend originating in white-labeled solutions developed for a more seamless client experience. Many advisors are now offering customized mobile applications to clients. To capture this next generation of investors, advisors must enhance and evolve their service and meet them where they are. Technological advancements can also enable advisors to focus on the human touch, an essential aspect of advice that is becoming increasingly important to Americans.
- Advanced tax planning. A recent PwC study reveals that nearly half (47%) of high-net-worth investors seek tax planning services from their wealth advisors, with 46% willing to switch firms to obtain this increasingly coveted service. Whether by referral, the development of a strategic partnership or outright acquisition, it has become clear that clients now view access to a CPA as a non-negotiable when selecting (or choosing to stay with) their financial advisor.
- Estate and succession planning. This value-added service represents another key piece of the puzzle as we navigate what has been billed as “The Great Wealth Transfer.” Advisors must offer access to estate planning experts who can provide the necessary legal guidance, a key factor in attracting new clients and securing the next generation of investors. Historically, family offices have supported UHNW business owners by providing comprehensive wealth management, estate planning and investment strategies tailored to their unique needs. For business-owning families, in particular, succession planning is crucial to ensuring that their legacy endures. To avoid losing clients to competitors with a more robust value proposition, advisors should consider expanding their offerings. This will help them align with the sophisticated expectations of affluent clients and remain competitive in a market where holistic service is increasingly expected.
The registered investment advisor industry, comprising more than 41,000 active firms managing $126.4 trillion, is increasingly competitive. Firms that fail to innovate and expand their service offerings face a significant risk of losing clients and market share to more forward-thinking competitors.
As technology advances, making sophisticated assets more accessible, wealth managers can benefit from adopting a family office-style framework to attract and retain clients. By implementing advanced technology, firms can streamline workflows and boost efficiency. Expanding services to incorporate estate and succession planning, advisors can position themselves as gatekeepers for all aspects of their clients’ financial lives, enhancing clarity and trust. Furthermore, employing tax professionals and CPAs can uncover valuable tax incentives for clients, subsequently increasing the attractiveness of the firm's services.
As client expectations evolve and financial products become more complex, RIAs must adapt their strategies and services to remain relevant and valuable. Firms that remain stagnant in their approach risk being left behind in this rapidly changing industry.
Matt Pearson is president of Nepsis, a national financial advisor and investment management firm.
