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Hallmarks of a Crisis-Proof Business

Hallmarks of a Crisis-Proof Business 

7 practices to help advisors thrive during the pandemic and beyond

Having upended life as we know it, the pandemic has brought into focus a fundamental — but often underappreciated — prerequisite to the pursuit of happiness in the modern world: our health. This has led many to reevaluate their priorities and strive to live more balanced and rewarding lives.

We see hard evidence of this trend through surveys — for example, a drop in the number of Americans now mentioning finances, jobs or travel as a source of meaning in life,  — and we see it anecdotally through everyday interactions. The neighbor who finally bought her wilderness oasis. The friend who took up woodworking. The coworker reluctant to return to the office and have less time with his family.

Wealth management clients are no exception. In fact, according to the Investments & Wealth Institute 2021 Investor Report, a sizeable 82% of people surveyed indicate that the pandemic has impacted what they feel is important or how they view the future.

In one sense, this could be viewed as bad news for advisors, as it coincides with (or is perhaps driving) growing dissatisfaction with financial advisors — particularly among ultra-high-net-worth clients. But in another, more enlightened sense, this is good news — an opportunity to meet clients where they are at, deliver the service they desire and win market share.

But what does rising to this occasion look like?

To help advisors answer this question, we studied six advisory businesses that are part of the Hightower family, have grown significantly since the pandemic began, and plan to continue growing at rates well above industry peers.

Looking closely at these firms resulted in a few main insights. First, they are adaptable. They are committed to growth, willing to evolve their business practices accordingly and open-minded toward trying new strategies. Second, they were well-positioned going into the pandemic, having already evolved toward best practices as part of an ongoing commitment to continually earn clients’ trust and confidence. Third, the best practices they have adopted — and that have helped attract new clients — are well within reach for a wide range of advisory firms, so long as the right mindsets and partnerships are in place.

These best practices include:

  1. A value-based approach to wealth management: As firms evolve their approach to meet the needs of modern families, some are placing a greater emphasis on family values. Incorporating family values into the financial planning process helps clients align their wealth plan with their priorities and opens up conversations between generations on the meaning and purpose behind family wealth. It also places the advisor in a valuable role of objective facilitator and cultivator of positive family dynamics.
  2. Creative fee structures: After reigning supreme over the last decade, the all-inclusive AUM fee model is being replaced or complemented by other, more flexible fee structures. These include one-time flat fees for specific services, such as financial planning; retainer fees; and hourly fees for project work. These pricing approaches appeal to CPAs and attorneys because they mirror their own. They also appeal to high-net-worth clients, who like accessing advice without feeling pressured to transfer their assets.
  3. Advisor collaboration: With greater wealth comes greater financial complexity. For advisors looking to serve higher-net-worth clients, providing truly holistic financial planning — beyond investing advice — is becoming increasingly necessary. Part of doing this successfully includes partnering with other advisors to identify and execute strategies on behalf of clients, as a team. The firms we spoke to invest heavily in building these partnerships and aligning around their clients’ goals.

To learn additional best practices helping advisors attract and retain wealth management clients, read our full whitepaper.

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Hallmarks of a Crisis-Proof Business

Whitepaper

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