The latest practice to be disrupted: Family office consultation

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Don’t look now, but family office client consultation is moving downmarket.

Specifically, the boardroom meeting uniting the client’s advice team is becoming commonplace. This is an opportunity for the client in one setting to meet with their advisor, accountant, estate attorney, insurance agent and other stewards to make sure that they are all working in sync. Together, they present a coherent, unified view of a client’s financial landscape.

For a long time, only the wealthiest clients enjoyed or expected this kind of white-glove service. That has now changed, thanks to shifting consumer appetites, the snowballing number and complexity of investment decisions and advances in technology.

The boardroom meeting presents a clear opportunity to educate the client and allow the professionals to directly coordinate with each other, minimizing the number of to-do's that end up on the client’s plate.

Clients expect their “money people” to be as integrated as the rest of their tech-infused world. We can buy groceries from Amazon. We can check our car’s gas tank from a mobile app. We get market data from smart speakers. In other words, we might feel the people on our personal financial team are out of step if they can’t work in harmony, considering the conveniences we’ve come to enjoy.

While changes in consumer technology have indirectly influenced client expectations, tech disruption has directly contributed to the downmarket push of family office consultation as well.

Fee compression, from low- or zero-cost asset management offerings by industry heavyweights, squeezes advisors to justify their value with more robust financial planning efforts. In this context, coordinated consultation can be a more potent way to differentiate your practice.

To an extent, this trend is a reaction to technology, sending advisors scurrying to adapt to a new normal. But smart automation creates opportunities, too.

More complex asset management strategies, like direct indexing and tax sensitive investing, were once the domain of ultrahigh-net-worth clients who could afford them. But cutting-edge advances in fintech give advisors the time and resources to bring these sophisticated value adds downmarket with white-glove service.

Anything that encourages more financial life coordination for clients is a positive. When more clients can enjoy family office style consultations, it keeps the momentum going. There is less chance of vital to-do's and next steps landing with a thud into a client’s lap, potentially to be forgotten, if everyone they need to talk to is in the same room. It’s good for the professionals in that room, too, as they can synergize for more referral opportunities.

Of course, the spread of family office consultation has implications for tech providers.

The onus is on us to address the ways a more coordinated financial team must access a client’s financial data. In practice, that means creating more read-only access, so everyone has a more complete picture of the financial landscape, as well as finding more solutions to help the varied professionals in the room work together.

In the end, whether or not your practice embraces family office consultation, your clients want you to be as coordinated and digital-ready as every other aspect of their interaction with the modern world. A decade of innovation since the financial crash has changed their perception of what is possible, and it’s incumbent on all of us to live up to those possibilities.

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Client retention RIAs Family offices Big data Amazon