Financial advisers continue to amaze me with their ability to harness technology to do business in new, creative ways.
Take Michael Black, a solo practitioner in Scottsdale, Ariz., whose firm, Michael Phillips Black Wealth Management, manages $75 million in assets.
Mr. Black, whom I first interviewed two years ago about his use of account aggregation technology, has come up with a unique process for transforming do-it-yourself investors into clients.
Many of his clients are lawyers, most of whom think that they can manage their finances on their own. The stock market upheaval over the past few years, however, has shaken the confidence of this bright, self-confident group, creating a window of opportunity for Mr. Black to show them what he has to offer.
His concept, which he calls “Smart Plan”, is based on account aggregation and it positions Mr. Black — at least initially — as a coach.
For $500, he guides prospects through the use of three online applications that allow them to be informed do-it-yourself investors. Most times, however, the process leads users to conclude that they need Mr. Black's professional help.
Here is how it works: The firm's Albridge Solutions Inc. portfolio-reporting system offers a client portal with a log-on for prospects. From there, they seamlessly connect to AllData for Financial Advisors from Cash-Edge Inc.
Having prospects handle this process themselves bypasses the labor-intensive step of gathering user names and passwords and entering them into the platform. In a sense, Mr. Black has converted an adviser expense into a game.
In observing this process, he noted what he calls the “40-over-and-under principle.” Basically, prospects 40 and under are perfectly comfortable inputting their account data, while those older than 40 immediately turn to him for help, and he said his firm is happy to oblige.
NEXT STEPS
Once the do-it-yourselfers have entered their data, Mr. Black receives an automated e-mail telling him that it is OK for prospects to proceed to the next step, which is coaching the prospect about which of the 45 report options in the Albridge client portal would be most useful for them.
Typically, prospects select reports covering account holdings and performance, as well as a benchmark comparison and portfolio snapshot.
Next comes application No. 3, MoneyGuidePro, the very popular
financial planning program from PIE Technologies Inc.
Mr. Black easily ports the client data into this program. After that, he instructs the client to log on to see — with a few clicks and drags — whether her or she is on track to meet retirement goals.
The program is goal-based — rather than cash-flow-based — thus making such illustrations easier to pull off.
“They either hire me right there or we both monitor it and, in a quarter or two, they say, "I see what you have in mind,'” Mr. Black said.
HAVING THE DATA
Once hired, he is able to take immediate action, since the client already has made available most of his or her financial life.
“Once I have that data, I can quickly show them how they are doing because I can take the data and go into Morningstar and produce my own more-comprehensive portfolio snapshot and run a risk analysis on a back-test basis,” Mr. Black said.
His next step is consolidating or integrating the process so that users could go through all the steps during one log-in session.
Mr. Black said that he would be happy to teach fellow advisers the nuances of putting the plan into effect. In his own words, he boiled the concept down to this: “Get the data, measure it, and apply it to the [prospect's] world.”
It certainly sounds simple enough.
Related links:
Michael Black process video
Michael Phillips Black Wealth Management
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A solution for financial advisers who are tired of client data entry (PreciseFP)
Looking to add legacy planning services to your practice? These tools can help
A better(ment) mousetrap for the mass affluent? (Betterment.com)
A different approach to high-tech planning (Veritat.com)
E-mail Davis D. Janowski at [email protected].
