Change can create chaos and uncertainty. With the full “Trump effect” still unknown, it will be difficult to predict what lies ahead.

But there are several underlying secular trends that are already in motion across the financial services industry. These trends will drive innovation in wealth management, financial planning, risk management and the customer experience, shaping the way advisers work to build wealth for their clients and successfully grow their practice during 2017.

HOLISTIC FINTECH EVOLUTION
Fewer apps will be dedicated to fanciful one-off objectives, and there will be a drive to develop integrated solutions that help advisers provide more holistic wealth management. The real fintech innovators are likely to develop more comprehensive apps and offer more fulsome platforms that give advisers a truly consolidated view across all of their clients’ holdings.

This trend goes far above and beyond the rise of robo advisers, which simply provide a low-cost automated solution for portfolio allocations. Instead, this new generation of apps and platforms will help advisers manage across taxable and tax-deferred investments, other held-away accounts such as insurance and annuities, and a broader range of clients’ assets and liabilities.

Jefferson National's Advisor Authority Study found that personalized advice for a holistic financial picture was the second most important factor influencing an investor’s decision to work with an adviser. To retain current clients and attract new prospects, the most successful advisers will need to differentiate themselves in this way, by integrating technology with traditional wealth management strategies for a more holistic approach.

PLANNING AND RISK MANAGEMENT INTEGRATION
With political and regulatory changes in the U.S. and abroad likely to cause greater uncertainty in 2017, advisers should prepare to manage two types of risk. Macro risk will reflect broader economic and market trends, such as changes in oil prices, interest rates and inflation. And as advisers manage for the impact of these prevailing macro trends, they must also manage the investment risk within clients’ portfolios, through diversification, asset allocation and rebalancing.

To identify and manage these two different types of risk calls for technology that helps advisers plan carefully and react swiftly on behalf of their clients, by continuously assessing and managing macro developments, after proactively determining a client’s tolerance for risk. This year will prove that successful advisers are both proactive and reactive in their approach to integrate financial planning and risk management.

CUSTOMER EXPERIENCE PRIORITY
For advisers to grow their practice, by gaining new clients and earning a larger share of assets from current clients, focusing on the quality of the client relationship is a business necessity. This in turn means focusing on the quality of the customer experience. In 2017, the most successful RIAs and fee-based advisers will evolve their service offering by creating a more seamless end-to-end customer experience to drive greater growth.

A seamless end-to-end customer experience begins on the front end by using technology to create a simple and transparent interface to give clients instant access from any device. It facilitates effective real-time communication across any channel, which ensures investors feel heard and understood when they discuss their lifestyle goals for retirement and estate planning. On the back end, it leverages integrated functionality to support a holistic approach to financial advice, coupled with the transparency, choice and cost control that is so critical for supporting a fiduciary standard.

Driven by demands for greater simplicity and transparency, downward pressure on fees, and an industry-wide move towards putting the client’s best interest first, it will be imperative for advisers to maintain a fiduciary mindset, regardless of regulatory decisions. This is true not just for advisers, but also industry-wide. The financial services companies that focus on creating greater choice for the end consumer — by providing a wider range of solutions and a greater choice of delivery channel — will be the winner.

THE ADVISER BENEFIT
While proactive moves may be hard to make during this year of change, it is important to be prepared to retool and react. Advisers should reframe what they do and control what they can — adopting the right technology to minimize costs and maximize tax-efficiency, take a more holistic approach to planning, effectively manage risk, and prioritize the customer experience.

And while many factors may remain out of our control, this could also be the year for using technology to improve communication with your clients, creating a mutually beneficial relationship that produces value on both sides of the table.

After more than a decade serving RIAs and fee-based advisers, we have seen first-hand that advisers achieve the greatest success when they put their client first. And there is considerable research to show that the key to growth and sustainability relies on an adviser’s ability to clearly understand and align with their clients’ needs — especially in challenging markets and times of change.

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access

Mitchell H. Caplan

Mitchell H. Caplan

Mitchell H. Caplan is CEO of Jefferson National, now operating as Nationwide’s advisory solutions business.