“The brand of full-service investment advice the industry has historically delivered is under attack,” states a white paper, “Digital Disruption: Is the Financial Advisor’s Value Under Siege?” released by Wells Fargo Clearing Services’ First Clearing last fall.
Alarming, perhaps; but the situation presents a chance to show high-net-worth clients how much they need human advisors: Deliver value that algorithms simply can’t, says William Coppel, managing director-chief client growth officer of First Clearing, in an interview.
“Advice goes beyond a portfolio of ETFs,” stresses Coppel, who spearheaded a program, available to First Clearing clients, that focuses on end clients’ well-being. The holistic approach aims to discover much more than just the amount of their investable assets.
Coppel calls a focus on client well-being the new advisor value proposition. It is designed to help clients enjoy a more fulfilling life, and, at the same time, can lead to FAs’ managing more client assets.
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The strategy builds on Wells Fargo’s Envision financial planning process but takes an even deeper dive to better understand what clients are saving for when they set specific dollar goals.
To compete with digital advice, full-service FAs need to go beyond financial aptitude to develop interpersonal skills enabling them to better know just where clients and their families are coming from. As yet, no robo can do that, notes Coppel, a financial advisor early in his career.
To draw out clients, FAs, first and foremost, must ask effective open-ended questions about their lives and concerns.
In the interview, Coppel discusses the two most important questions an FA should ask.
ThinkAdvisor recently interviewed the clearing executive, on the phone from St. Louis, Missouri, headquarters. Prior to First Clearing, Coppel was with Quick & Reilly for 25 years. He contends that if advisors don’t adapt to and adopt industry changes propelled by advanced technology, they will simply become obsolete. Here are excerpts from our conversation:
THINKADVISOR: Why is focusing on client well-being so important for financial advisors?
WILLIAM COPPEL: The role of an advisor is to help families achieve well-being. That goes far beyond their money. It’s not about rates of return or risk tolerance.
Why is now the right time to zero in on well-being?
There’s an opportunity that FAs can capitalize on: There are a lot of nervous people out there struggling to make tough decisions. A good, sound partner that can help them think through and navigate challenging complex and emotional situations is valuable.
Your white paper says that advisors should ask clients better questions beyond the usual ones and that this will help them through the process that answers those questions. What are examples?
The two most important questions an advisor can ask are, first, “Tell me about yourself.” The client will begin to tell that story. When they pause, the next question is: “Tell me more about that.” We’re typically an industry of a list of 55 questions: Check the boxes, fill in this or that. We’re now saying, “Let’s take it a step further and go deeper. Given the opportunity, people are very happy to share information if they believe they’re in a safe environment and that it’s beneficial to the relationship. Humans find value in communicating [verbally], which you can’t achieve through a digital relationship.
What else can’t robo-advisors do at this state of development?
Computers can’t create emotional connections, and they can’t provide insight, which, in this situation, is about things that will have an effect on people’s finances. Sharing information goes beyond what’s on the balance sheet. It’s about: Tell me what’s important to you. Tell me about your life.
You’ve suggested that advisors work up a client “Wellness Profile.” What’s that?
It shows where clients are physically and emotionally. It helps FAs think more holistically about what will fulfill the client. There’s also a Network Profile, which is about how clients relate to their family — vertically, between generations — and to friends, colleagues and the community.