Design services for your next client

At a conference several weeks back, I was talking with a seasoned wealth manager about his business. He had been running an independent practice for roughly 20 years and he had a great, profitable, steady business. 

As we were conversing, I inquired about the services he was offering his clients. He stated that he had broadened beyond asset allocation and investment management and was offering his clients financial plans as well. When I asked about other services his clients might want from him, he gave me a blank stare and replied, “No one seems to be leaving, so I figure I’m providing great service.”

For those advisers who are planning on exiting the business this year, this may be a totally appropriate answer. But for those who plan on serving clients for another five, 10, or 20 years, this attitude will certainly lead to a slow death of the business.

If you want to have a firm that not only serves existing, long-term clients, but is also positioned to attract many new clients, it’s crucial that you design your firm not just for your existing clients. You need to design your firm for your next client. Ideally, your next best client. 

Instead of focusing on what pleases your existing clients, determine what services and offerings a new client would want from a wealth manager. The reality is, if all you are offering is asset allocation and financial planning, you likely won’t attract many new clients.

The leading financial advice firms today offer services far and above the traditional wealth manager. They offer great technology that provide a range of investment solutions that were manual and labor-intensive just a few years ago. They offer not only tax planning and advice, but tax compliance as well (i.e., tax returns). They provide estate planning solutions. They fulfill on insurance needs and even provide advice on Medicare and health insurance planning. 

Your next new client will likely interview not just you, but some of your competitors as well.  The truth of the matter is it’s so easy to shop a few different advisors. Gone are the days of taking half a day and driving across town to meet with a new advisor. Today, a couple can interview three different advisors in one afternoon, all from the comfort of their home via Zoom. 

If what you offer in products and services is vastly different than leading advice shops, you’ll likely lose out on the business. 

Odds are you won’t be able to provide all of the services in-house that large RIAs provide, but that shouldn’t stop you from having those services lined up for your clients ahead of time. You can partner with a tax shop, law firm, and insurance agency. Plus, you can use a variety of outsourced investment management solutions for tax-loss harvesting, risk management, and so on. Once you have these relationships in place, you can offer this wide range of services to your clients. 

Bottom line: the future of our industry is moving fast and far beyond investment management and financial planning. Either keep up with the industry or be left behind.