Holistic financial planning to grow your wealth management practice

The wealth management industry has seen a shift from sales-focused relationships to holistic financial planning. Yet, long-term implementation of financial planning as a core service has lagged. According to Practice Innovation Index respondents, 23% of practices provide limited to no financial planning, 27% offer targeted planning focused on specific client needs, and 39% offer comprehensive financial planning that covers clients’ entire financial situation. But only 11% of clients are offered multi-generational protection and transition planning.¹

Multi-generational transition planning is the most complex offering — and we believe it’s also an opportunity. Those that offer these services are, in our view, positioned to deepen their relationships with clients and advance their practices upmarket. The good news is that many practices are already asking some of the right questions and leveraging some of the right resources.

If you’re looking to capitalize on this opportunity, here's some information to consider.

Think about multi-generational planning

Multi-generational planning can take work. Evolving client conversations, as part of a broad-based research and discovery process, aim to get an accurate idea of assets and goals. Wealth managers tend to offer this service more often as their average client size grows. As a comparison, 7% of clients with less than $2 million in investable assets receive this service versus 19% of clients with more than $10 million.¹ But financial planning legwork may benefit a practice no matter its client size.

Expand wallet share

The financial planning process often uncovers external assets (e.g., held-away accounts, retirement plans) that clients may want to consolidate. With a broader view of a client’s situation, a wealth manager can potentially give more complete guidance. We believe improved visibility also supports the implementation of a financial plan, a challenging task when that visibility might be lacking.

Move upmarket

Financial planning may help expand a practice’s horizons. Becoming an active partner to existing clients could signal to potential clients the ability to support their wealth needs too. In our view, wealth managers that develop expertise in nuanced planning topics or employ dedicated planning staff set themselves up to capitalize on the growing market for financial planning guidance.

The industry shift toward more holistic financial planning presents opportunities. Practices capable of meeting a broader set of wealth needs are, in our view, better positioned to hold on to assets when wealth gets transferred. They may also grow organically. For wealth managers looking to expand their service offerings, we believe opportunities abound as well. Investors may ask more questions as they better understand their situations. Practices may have an opportunity to position themselves to deepen relationships with current clients and attract new clients.

Expand your practice offerings

Holistic financial planning is resource-intensive. Financial professionals must spend more time with their clients to keep them moving toward their goals. According to Practice Innovation Index respondents, just 40% of clients have a completed wealth management plan that’s reviewed annually. Clients of mega-teams with at least $500 million in assets under management, are only marginally more likely (46%).¹

The disparity suggests to us that while the industry has shifted toward financial planning as a core offering, implementation hasn’t kept pace. We believe practices that offer financial planning must develop strong servicing models with an ensemble-style approach. Defining roles within the practice may support that strategy. As the offering grows, new career paths for junior financial professionals and support staff may emerge.

Client onboarding may set the foundation for a long-term partnership. Practices should, in our view, use the discovery phase to introduce processes and workflows that encourage sharing and build rapport. Most wealth managers who responded to the Practice Innovation Index (87%) ask comprehensive, goals-based questions during the client discovery process. Far fewer (57%) ask values-based planning questions. Mega-teams are somewhat more likely to pursue both lines of questioning (95% and 71% respectively).¹

A deep understanding of the client and their goals may help foster a successful relationship. Leveraging internal tools such as checklists or guidebooks in early meetings makes the planning process potentially more efficient. Mega-teams may take it a step further, gathering client details through comprehensive planning experiences that place the client on a wealth spectrum and inform subsequent meetings. Consistent processes may promote scalability. A repeatable onboarding process may simplify new client acquisition without drawing resources away from other parts of the practice.

In our view, planning continues after onboarding ends. Regular client check-ins may reinforce the value of maintaining a financial plan. Having conversations based on a client’s needs and aspirations may keep them connected to the plan. In times of economic uncertainty, the financial plan potentially shows progress and reminds clients to stay the course.

Find growth opportunities for your practice

Wealth management practices offer their clients seven different planning services, on average. That breaks down to 4.5 financial planning services and 2.5 advanced planning services. Offerings generally include retirement income (95%) and retirement accumulation planning (88%) with insurance (69%) and education funding (68%) also common.²

Adding new services may open a path to growth. With healthcare improving and people living longer, elder care continues to gain importance. But few practices (33%) offer elder care planning as a core service,² perhaps due to its complexity. This offering may elevate a practice above its competitors. We believe advanced planning services, such as tax planning (46%) and trust services (30%),² present other opportunities. A wealth management practice with the proper expertise can potentially differentiate itself and continue to evolve.