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Insights and best practices for successful financial planning engagement
• Inna Rivilis • December 3, 2020
What’s driving the growth of holistic wealth planning?
Those in the financial services industry are well versed in fee compression, regulatory pressures, and the commoditization of investment management. The evolving needs of clients are steadily becoming a major force of change as well, as you can see in Fidelity’s Advice Value StackSM.
It is the convergence of all these different forces that is requiring financial professionals, and the home offices that lead them, to reevaluate their value propositions and discover what a holistic wealth planning practice could do for long-term business growth.
There’s a large subgroup of financial advisors out there who have been in the business for a while and are pretty successful at selling annuities or mutual funds. But they don’t do planning and they struggle to adapt, primarily because their current approach is working just fine. But what’s working now may not work in the future and being slow to adapt could spell trouble down the road.
The majority of home office professionals or those in leadership roles, however, understand they need to strategically align their business with the shifting demands of the marketplace. Most financial professionals see planning as a good business opportunity—not only for the impact it can have on clients, but also because of this course change within the industry.
At Fidelity, we believe that the best path forward is to offer planning, specifically holistic wealth planning. While many financial professionals also see the path as promising, we have worked with enough firms to know that there can be struggles to either transition, grow, or establish a holistic wealth planning practice.
Through research and interviews with hundreds of advisors, Fidelity has identified a path to advance a firm’s holistic wealth planning practice, supporting early planners along a maturity curve to become Advanced Planners.*
Advanced planner firms—those furthest along the maturity spectrum—are optimizing their planning practice. For example, advance planner firms spend 1.5x the amount of time on each plan. By spending more time to develop a plan, it moves from being a transaction to an opportunity for deeper and broader knowledge of clients’ lives. On top of this, we found nine in ten advanced planner firms utilize a central planning team.
Our research uncovered four areas of concentration advanced planner firms acted upon: culture, technology, training, and marketing. Understanding these areas and their connection to the maturity model, can help guide professionals on a step-by-step process to implement holistic wealth planning.
If we draw back to that earlier example of the subgroup that was hesitant to get into planning, this group is somewhere between five years in the business and primarily focused on sales. They may work in banks or branch offices. For a majority of them the goal is to get up to speed on financial planning, but their organization currently lacks the tools or structure to support them.
Here’s how incorporating some of the practice management techniques could be implemented for this group:
As more and more firms attempt to meet the investor demand for planning, business models that support financial professionals in their implementation of holistic wealth planning will capture wallet share.
To learn more about where you or your firm is at in the process of becoming more advanced, as well as what you have to do to move up the maturity curve, check out “The Holistic Wealth Planning Maturity Model.”
*All data referenced is from the 2020 Fidelity Financial Advisor Community—Financial Planning Study
Source: 2020 Fidelity Financial Advisor Community (FAC), Financial Planning Study, January 2020, n=393
eMoney Advisor LLC is a Fidelity Investments company and an affiliate of Fidelity Brokerage Services LLC and National Financial Services LLC.
Fidelity Institutional® provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC.
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