Technology guide for firms that turn to next gen clients

Along with many in the industry, our firm is increasingly open to the idea of finding innovative ways to establish profitable relationships with tomorrow’s life blood of our industry — young clients. To that end, my firm BerganKDV Wealth Management, launched a next-generation financial planning service model a little more than a year ago called Lifewise.

In a sense, we have built a firm within a firm. We separately brand our next gen service offering, trying to communicate something more relevant to our target audience. The Lifewise messaging differs from that of our more traditional wealth management model by focusing on different pain points that are more relevant to the younger target audience.

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In addition to different branding, we’ve also worked to build out more automation in our service and marketing efforts. We do, however, still have a long way to go to reach the holy grail of fully automated and integrated systems.
Three simple takeaways that we’ve learned over the course of the last year-and-a-half may help other firms serve next gen clients, too.
One of the big advantages to targeting next gen clients from inside an existing firm is that much of the technology infrastructure is likely already built, making it inexpensive to test the next gen waters without giant hard dollar costs.
For example, it’s likely that a firm already has in place a client relationship management system and financial planning software – arguably the two most critical components to delivering on a financial planner’s value proposition.
One thing I would do differently, in hindsight, is to leverage the firm’s existing technology stack more at the onset of the project, instead of looking for tools more specifically catered towards serving next gen clients.
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Firms can always add tools later — whether that’s a planning software like eMoney with a client dashboard or a robust college planning calculator — to enhance their next gen service model. But at the beginning, the focus should be less on adding new tech and more on leveraging existing tools to help limit the financial investment.
Even with a lean start-up mentality in mind, there are a few technology tools that are critical to serving next gen clients. The movement to serve next gen clients is largely built on the monthly retainer model, which requires the technology to streamline that transaction for clients — as they should not be expected to write a check! Enter online payment platforms.
PaySimple and AdvicePay, which is a venture launched recently by XY Planning Network, are two of the more dominant online payment platforms that allow advisers to streamline monthly billing. Our firm leverages PaySimple, which allows us to fully automate the ongoing billing process, making things easy for us and the client.
Robo to the Rescue
Another critical piece to serving next gen clients inside a firm (and outside) is ensuring that the firm can accommodate younger client’s investments.
Our firm’s value proposition for younger clients has nothing to do with delivering alpha and everything to do with delivering value through financial planning. However, helping clients align their goals with a low-cost and long-term asset allocation remains an important step in the planning process.
We leverage Betterment for Advisors to automate the investment process from A to Z. It allows us to focus on what advisers do best, and that’s working with clients. It results in less adviser handling of paperwork, opening accounts, and rebalancing, all of which is automated with Betterment for Advisors.
It also helps us provide an straightforward online client experience, as most young professionals are used to signing up for virtually anything with ease.
In the end, much of a firm’s existing technology stack should suffice for getting a next gen service model up and running. That will help to keep the initial financial investment and ongoing overhead low.
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Each firm’s approach to next gen will likely be different, but the playbook should be relatively similar: stay lean with technology at the onset and automate as much of the manual processes as possible, especially those that aren’t directly related to the value delivered by advisers.
Matt Cosgriff is a financial adviser with BerganKDV Wealth Management.