[The ardent reporting on the $84.4 trillion Great Wealth Transfer now underway needs to specifically underline that there is much more at play here than just a repositioning of money. It requires thinking beyond assets, into relationships. It also comes with differentiated generations of investors, an evolutionary shift in the framework of financial planning and advice, and addressing the evolving expectations of how clients want to engage with advisors and wealth professionals.
This investor marketplace pressure will continue to fashion and evolve the modern financial advisor business model into what some call the emergence of “Advisor 3.0”. This business model acknowledges and prepares advisors to engage clients on different personal, family, and business challenges embedded, and deeply rooted, in not only financial, but also unique life situations.
The Advisor 3.0 model will need to integrate specialized technology to efficiently manage extensive client data, deliver unique digital client experiences, and drive client engagement that will pave the road to success for the modern advisory relationship.
To better explore this advisor business model evolution and how it can transform the “Great Wealth Transfer” into the “Great Relationship Transfer”, we reached out to Institute Founding members Daniel Kenny, Chief Executive Officer, and Kristian Borghesan, Chief Marketing Officer, of FutureVault – an award-winning white-labelled, AI-Powered Digital Vault platform for financial institutions and the pioneers of the Client Life Management Vault™.
We asked them to share their unique perspectives on what they see as a shifting advisor service model and how FutureVault positions its Digital Vault and AI technologies into a strategic enterprise advantage for advisors and wealth managers in competitively positioning themselves to deliver comprehensive Client Life Management services and capture the “Great Relationship” Transfer. They see this as becoming a driving force in accelerating the financial services industry into a new era of cross-generational relationships and holistic, integrated wealth management services.]
Hortz: Can you share your perspectives on what you see as the evolving Advisor 3.0 service model and what you term as Client Life Management?
Kenny: Many advisors are gradually moving towards a new business paradigm that is no longer limited to investment-only advice and that many in the industry are referring to as “Advisor 3.0.” This evolution comes as a response to the growing demands of clients for a more comprehensive, personalized, and integrated service that addresses all facets of their financial and personal lives.
McKinsey & Company analysts suggest modern financial advisors will become “more like integrated life/wealth coaches who advise clients on investments, banking, healthcare, protection, taxes, estate, and financial wellness needs more broadly.”
We prefer the terminology of “Client Life Management” as it is more descriptive of what an Advisor 3.0 does versus just the tag line. These modern financial advisory firms are increasingly adopting a white-gloved, family office-like service model that is not only redefining the financial advisor value proposition but also significantly enhancing the experience and outcomes for both the financial firm and its clients.
Borghesan: Client Life Management is pivotal to the success of the modern advisor, and the relationships advisors build with their clients. This approach encourages advisors to engage with clients at every stage of their journey, from that very first interaction to legacy planning and beyond.
By addressing the entirety of a client’s financial, business, and personal life – plus keeping it organized and safe – advisors can forge a deeper, more meaningful relationship. This comprehensive engagement strategy serves as a digital moat, enhancing the financial firm’s competitive position by fostering trust, expanding influence across family members and generations, and ultimately, creating a highly referable business.
The value proposition of adopting a Client Life Management perspective is clear. It allows advisors to become indispensable, guiding clients through life’s complexities with sage advice and integrated solutions. This paradigm shift is coming like a freight train and will undoubtedly transform modern advisory firms to the forefront of leading the charge.
Hortz: What role does technology play in the actualization of this enhanced business and service model?
Borghesan: Technology is a driving force for transformation. Advanced digital tools and data platforms enable advisors to deliver personalized services efficiently and at scale. These technologies give advisors access to actionable insights, data, and valuable information (including documents) across their entire life, from tax planning and estate management to medical and healthcare planning.
We spend a lot of time talking to firms and advisors about how Digital Vaults bring multi-generational engagement (and value) to the table, paving the way for a modern high-touch advisory relationship. When coupled with AI and private LLMs, Digital Vaults offer Intelligent Document Processing transforming static documents into rich, dynamic and intelligent enterprise assets.
Kenny: Investing in the right tools, technology, and resources, especially with the intent to deliver the most unique digital client experience and drive client engagement, will pave the path to success naturally by providing a means to foster deeper relationships with clients.
Digital Vaults, as an example, position a new paradigm in how everyday information, client information, is managed, accessed, and delivered to clients, to their family members, through their Centers-Of-Influence, and to their network of Trusted Advisors, and vice versa.
When structured properly, digital vaults serve as the central repository for all of the important documents and the single source of truth for all data that clients and their families need to access in the event of a change in circumstances, such as the passing of a family member, liquidity events, or the retirement of an advisor. This sets a firm foundation for the client service relationship, as advisors can now address the entirety of the client’s financial, business, and personal life.
Hortz: What is the significance of this advisor business model of Client Life Management in relation to the Great Wealth Transfer?
Borghesan: The significance of the Advisor 3.0, Client Life Management model shift becomes even more pronounced in the context of the Great Wealth Transfer. For advisors and wealth managers to maximally navigate this massive $84.4 trillion opportunity and gain a competitive edge, they should shift their mindset and position this as the Great “Relationship” Transfer and not just focus on the wealth piece of the puzzle. By adopting the integrated life and wealth advisory model and meeting the needs of younger clients as well as older ones, advisors will gain trust and loyalty of the next generations.
Kenny: To win relationships in this massive money-in-motion opportunity, advisors should consider strengthening their differentiation in this hyper-competitive market, offer a tech-enabled Client Life Management high-touch, bespoke service that appeals to high-net-worth individuals and families.
Advisors also often find greater job satisfaction in delivering comprehensive services that have a meaningful impact on clients’ lives, leading to higher engagement and retention of talent within the firm.
Hortz: How do you see these trends evolving into the future for the industry?
Kenny: As we look to the future, it is evident that the role of the financial advisor is not just evolving; it has already evolved. In embracing this new role, advisors will not only ensure their own success but also secure the financial well-being and fulfillment of their clients across generations. They will have also earned their being the client’s primary financial relationship by quarterbacking disconnected client financial teams to coordinated contextual interactions. The future beckons with promises of deeper relationships, enhanced trust, and unprecedented opportunities for financial industry growth.
This article was originally published here and is republished on Wealthtender with permission.
About the Author
Bill Hortz
Founder Institute for Innovation Development
