Scaling Financial Advice and Collaboration in a GPS World

Road map

We live in a real-time traffic, turn-by-turn directions, GPS world. Why do financial institutions still hand out the equivalent of gas station maps?

I hear from many financial institutions that creating financial plans for their clients is an important goal, in fact some have goals to provide financial plans to all or a significant percentage of their clients. Part of this is a noble goal– firms will be able to do their best work when it’s relevant to a clients’ unique situation and goals. But it also makes good business sense. Research links financial planning to deeper wallet share and a higher likelihood achieving that elusive “primary financial advisor” status.

Unfortunately, the client’s experience at most firms goes something like this:

  • Bring your financial advisor a briefcase full of personal papers (tax returns, bank and brokerage statements, insurance policies, will, trust documents, etc.)
  • Your financial advisor, their financial planner colleague, or one of their assistants will manually input data from your personal papers into financial planning software.
  • Meet with your advisor again and receive a spiffy multi-page document with color pie charts and bar charts a bunch of text (that usually says you will not be able to meet all of your financial goals unless you immediately and significantly increase your savings and reduce your spending).
  • File your financial plan away with the rest of your personal papers.
  • You may get a call in about a year to repeat the process (or maybe not, if they were just conducting a box-checking exercise).

That’s the paper gas station map, folded up inside out at the bottom of your financial glove box.

Firms should be integrating a broader view of client data onto their desktops and into their financial planning process. According to research from CEB Tower Group, 90% of advisors cannot see a consolidated view of their clients’ holdings that are held away from their firm, and 76% cannot even see a consolidated view of their clients’ holdings within their own organization!

It’s not just financial planning. The client onboarding process is often a similarly manual process that also often squanders significant opportunity to improve client engagement.

It’s time to bring the industry into the GPS world.