Meeting the expectations of tomorrow’s savvy clients

I recently attended two industry conferences, the first an M&A conference sponsored by DeVoe and Co., and the second the Tiburon CEO Summit hosted by Chip Roame. My big takeaway? Over the next several years, consumer demand for professional financial advice will continue to grow, but the expectations of clients will also rise.

If you’re near the end of your career and have an established client base comprised mostly of retirees, and you’re not focused on growth, this may not concern you. However, if you’re trying to grow, or want to be able to find new clients as you lose older clients, you need to be prepared to dramatically upgrade your service.

Here are a few examples of what the more forward-thinking RIAs either offer or soon will offer their clients.

A first-rate digital experience: Most of the clients who will seek out your services in the future are in the workforce and have learned how to conduct business remotely. Their experience sharing files, hosting video meetings and consuming content digitally has greatly expanded as a result of COVID.

A full 82% of the new clients who have joined my firm in 2021 did so without ever meeting one of our advisers in person. The introduction, onboarding and servicing has been 100% remote and digital.

While no one knows exactly what percentage of people will prefer this when things return to “normal” — whatever that might be — the thinking is that a sizable chunk of our new clients will never meet with their adviser in person.

Make no mistake, however, these clients expect much more than a simple Zoom call followed by an email. They expect secure portals to upload files, electronic signatures and statements, texting, apps, 24/7 access to their accounts, frequent communications, comprehensive and educational (but easy-to-use) websites, and more.

A greater range of services: Most of the larger, national RIAs provide more than just asset management and financial planning. Tax planning and tax compliance (filing tax returns) are becoming common offerings, as many consumers perceive that having tax planning integrated with financial planning is a superior, more efficient model.

Other services that are now being offered by the larger RIAs include estate planning, including the drafting of documents; Medicare planning; and insurance consulting and implementation.

Clients also want personalized investment management. Many consumers are looking for something more than a basic asset allocation to exchange-traded funds. The progressive RIAs can offer portfolios such as personalized indexes using individual securities, which can be advantageous for both tax-loss harvesting as well as maximizing charitable giving.

Lastly, the planning tools that are being utilized at the faster growing RIAs provide robust analysis in areas such as Social Security claiming strategies, security location approaches, Roth conversion planning and more.

Many advisers see the consolidation that’s occurring in our industry as being wholly driven by financial reasons and succession planning, but it’s a lot more than that. A large part of M&A is being driven by the need to keep up with the services that clients are demanding.

If you want to grow your practice, you’ll either need to get up to speed, or you might have to consider merging with another firm that already has these advanced tools in place.

[More: 3 drivers of record M&A activity]

Scott Hanson is co-founder of Allworth Financial, formerly Hanson McClain Advisors, a fee-based RIA with $13 billion in AUM.