Sponsored by Sanctuary Wealth Partners
Most financial advisors would say their job is to help clients improve their financial lives. And more advisors are taking a holistic approach to their practice and working on multiple facets of clients’ financial lives, allowing them to build the trust and deeper relationships necessary to truly help their clients beyond their individual financial health.
But sometimes the advisor’s client-facing efforts are impeded by their employer, which might restrict the types of conversations they can have with clients or mandate that advisor-client interactions follow predetermined paths. Ultimately, these restrictions can keep clients from getting the help and guidance they really need.
Top-down versus bottom-up
Wirehouse firms often take a top-down approach to client conversations, applying the same framework to each of their clients regardless of circumstances or needs. The goal for these firms is to limit the potential risks of those interactions and to ensure an efficient, compliant process.
Unfortunately, that one-size-fits-all approach leads to standardized care for a heterogeneous client base in everything from investment selection to performance reporting. “Even if the clients wanted to see their performance report in a certain way, it doesn’t matter,” says Jim Dickson, president and founder of Sanctuary Wealth Partners, an independent division of Noyes Group, a full-service financial services firm. “Any customization to the client experience isn’t allowed.”
- The alternative is to take a more individualized, bottom-up approach to managing the advisor-client relationship. This approach enables highly qualified and experienced advisors to make judgements about how best to serve a client’s needs, individually or with trusted partners. It also gives these advisors the latitude to serve the client where they feel the need is greatest, including in the following areas:
- Personal finance and tax planning: Clients face many hard decisions about how to spend and save their money. This includes budgets, goals and how to maximize their post-tax dollar. Advisors who can have deeper conversations around these issues can help with the issues that matter most to their clients—not necessarily the areas that matter most to their firm.
- Legacy planning: An estate or legacy plan requires balancing the client’s current financial needs with their plans for their wealth after they die. These decisions can be critical in a client’s ability to achieve their financial goals, both today and in the future.
- Generational wealth planning and management: Many clients want to make sure future generations can responsibly manage the assets that are part of their legacy. Trusted advisors need to be able to identify when these conversations need to occur, how to help multiple generations discuss wealth, and have the ability to advise clients on tools needed to make informed decisions about their family’s wealth.
- Health and wellness: There is a difference between a conversation about an investment product and one about the client’s needs and values around a particular issue such as longevity. “Instead of guiding a client toward long-term care insurance, advisors need to be able to sit down with that client to discuss what quality of life is important to them and how they can achieve that,” says Dickson.
Essential to being a holistic financial advisor is being able to meet your clients when they need your help and guidance through the issues that matter most to them. Advisors who can choose how and when to have these conversations, all within the broader fiduciary structure, deliver more value to their clients. The ability to embrace these deeper relationships and responsibilities, allows advisors to build practices that focus on the holistic client needs, not just their assets.
