From the November 2007 issue of Wealth Manager Web • Subscribe!

The New Models

You don't have to be a psychologist to know that in the end, customers get what they want. The financial services industry, however, is so enamored with determining what retirement-aged clients' need that it is largely ignoring the roar of what clients want. And what they want has little to do with products or technology. They want advice. They want guidance, someone to talk to, someone reliable, knowledgeable and--most importantly--trustworthy to listen, provide assurances and help them make informed decisions. But is this what they're getting?

Often, they're given elaborate financial plans that ultimately lead to financial products necessary to fulfill their goals. But products don't answer questions; people answer questions. And, one thing you can count on: The client planning retirement has lots of questions. And if clients are not being served in the way they want, if their demands are not being met, the model is doomed to fail.

Expanding Service Models

Advisors who are capturing this business are those who are expanding their service models, reinventing their practices by investing in the right people, processes and technology to meet the changing needs of their clients.

Consider, for example, Richard M. Cott, chairman and CEO of InvestLinc in Chagrin Falls, Ohio. Cott noticed how interconnected the physical and financial health of his retirement-age clients had become and established a Life Services Division to complement the firm's wealth management and wealth integration practices. InvestLinc partnered with the Cleveland Clinic to provide private equity and wealthy clients with an array of executive health services including membership in Health Link, a health care concierge service. InvestLinc has also partnered with Dr. David Zelman of Transitions Institute to address issues of emotional well-being and connects interested clients with a family memoir recording service.

Another advisor who has adopted a new service model to meet his clients' changing needs is Michael Piotrowicz of Legacy Advisors in Plymouth Meeting, Pa. Historically, Legacy's practice focused on providing estate tax planning and business succession planning services to high-net-worth individuals and business owners. As his client base aged, however, Piotrowicz saw clients' objectives shift to security and financial independence in retirement. In response, Piotrowicz adopted a holistic wealth management model and made two major investments--expertise and technology. He formed financial planning and asset management units, and invested in a state-of-the-art technology platform, Legacy Wealth Organizer--all geared to making Legacy associates better advisors.

While there are many other examples of advisors who are developing unique approaches to the retirement market, they all start at the same place: Listening to what bothers their clients, building a team of specialists who can address those needs, and delivering that service in a way clients will find meaningful.

Service Delivery

The second part of the equation is delivering these novel services to your clients. Does this mean sitting across the kitchen table with a three-ring binder, reviewing a retirement plan? Does it mean setting up your financial advisory firm in the atrium of your regional retirement living center? How about making your service just a mouse-click away by putting data on a secured Web site that the client can log onto any time, day or night?

When it comes to providing service, the financial services industry--like many other industries--is trending towards self-service. Technology in the form of automation ostensibly provides better, more efficient and more accessible service. When the goal is automation, the price is usually paid in the form of headcount: better technology, fewer people.

Case in point: Call centers, where there is a live person on the other end of the phone who understands and answers the question, are becoming a thing of the past. Now, after navigating through multiple layers of systems prompts, you undoubtedly reach your breaking point and start banging the zero key hoping that an operator will answer and transfer you a few times until you ultimately end up leaving a voicemail message for what you hope is the right person.

Do consumers want automated service? The answer to that question may rely on the type of service provided. For example, your clients may be accustomed to and, in fact, may actually prefer punching in a few numbers to order a prescription refill, but are they bothered by entering their social security and account numbers before reaching a live financial service representative?

Not everyone in this space relies on technology to promote self-service. There are those advisors who leverage technology to enhance their personal service. This camp believes in service as a key differentiator, and technology is used to enhance--not replace--service. This is the "high-tech-enhances-high-touch" camp.

Look no further than in the banking industry to see the duality of these trends: 53 million people, or 44 percent of Internet users and one-quarter of all adults, now say they use online banking. These figures represent a 47 percent increase over the number of Americans who banked online in late 2002, according to a 2005 survey, "The State of Online Banking." In fact, a Harris Interactive study recently showed that bill pay is in the top three factors considered by consumers when choosing a bank.

Yet the bank whose branches are getting--on average--more traffic per month than the average Burger King or McDonald's is the bank whose branches are open expanded hours, seven days a week, 363 days a year: Commerce Bank. Headquartered in Cherry Hill, N.J., Commerce Bank believes customers want to talk to a live person whenever they call--day or night. It also believes customers want a place to stroll into and people to talk with face-to-face, and is, therefore, currently investing millions of dollars in its call centers and branches. (Full disclosure: The author's company is a wholly-owned subsidiary of Commerce Bancorp.)

We see the same types of service delivery bets being placed among retirement planning advisors. On the one hand, are the advisors who rely on technology to automate their retirement planning practice, to work behind the scenes so they can concentrate on meeting with clients. They look to technology to lead their clients to a product choice; they make the sale, and move on while relying on technology to sustain the relationship.

The other camp relies on people to uphold the relationship and uses technology to make their staff more informed and better prepared. Rick Van Benschoten of Lenox Advisors, a New York-based wealth management firm, is in this camp. Lenox uses technology to identify client touch-point opportunities. Lenox looks to its technology to give them more reason to contact clients--not less. Because, as Van Benschoten aptly puts it, any time you can sit with a client, business will be generated.

Lenox invested in a technology platform, Lenox CFO, to proactively provide financial planning advice. This technology enables Lenox to more efficiently prepare financial plans and make more comprehensive client presentations. The technology also has sophisticated concierge-level service capabilities that give Lenox reasons to get in front of their clients more often with value-added suggestions such as portfolio rebalancing, notification of optimal price to exercise stock options, passport expiration notices and Crummy notices.

It is these value-added services that are memorable to clients. In fact, when Spectrem Group, a Chicago-based consulting and research firm specializing in the affluent and retirement markets, conducted its Advisor Satisfaction Survey, respondents valued a return phone call even more than getting good returns on investments. (See chart on page 60.)

The key to serving this market well is understanding that clients have many questions, but don't necessarily know where to get answers. They know that the information is out there--even at their fingertips somewhere in cyber space--but they don't know how to access it. They need someone to distill it. They need an expert who can provide clarity, direction and most importantly-- reassurance.

Your practice will thrive if you listen to your clients' questions and concerns, take note of patterns, and respond by adding people and technology to better meet their needs in the way they want their needs to be met.

Edmond Walters is the founder and CEO of eMoney Advisor (, a wholly owned subsidiary of Commerce Bancorp in Conshohocken, Pa.

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