A year ago, Facet Wealth CEO Anders Jones snagged my attention (and in full disclosure became one of my clients) at a conference. My presentation topic at the event, ironically, was about developing excellent client-service models to increase the value of advisory firms.
Jones told me he and his Facet team “…created a unique business designed to service smaller client accounts on which most advisory firms lose money.”
Admittedly, I was skeptical. Throughout my career, I have heard the “we are unique in how we serve clients” line for what seems like a million times. Following my speaking engagement, Jones and Facet CFO Lisa Rapuano explained further.
The team at Facet created a client experience backed by a proprietary technology platform designed to cost-effectively provide fiduciary financial planning advice to small accounts — less affluent clients. What they did (through artificial intelligence) was take the financial planning process using the components and teachings of the CFP curriculum and scale it for the benefit of the average American.
I was floored upon viewing the technology platform that drives their financial planning process and encompasses their client experience. There were two things that truly stood out about it.
First, it is genuinely financial planning focused.
Each client within Facet Wealth receives access to their technology program driven by systematized, one-on-one meetings. The technology helps guide the client through their goals and planning, giving the client many choices and pathways to direct their financial lives.
Second, each client is assigned a living, breathing CFP to work with them.
The scale of the technology allowed every CFP in the country who works for Facet to impact more lives, increasing the average 75 clients per advisor to 200-plus clients.
This alone should have been enough of an impact for Facet to stop there. They have built an experience that will change the lives of many average American families. But, instead of stopping at the consumer market, Facet also decided to impact the advisory industry as a whole.
More Problems Solved
Today, the average advisory firm has roughly $400 million in assets and an average of 920 clients. Using the 80/20 rule (80% of the revenue driving assets are held by 20% of the clients), this means roughly 736 clients are virtually unprofitable to the typical advisory firm.
This creates a myriad of issues around growth, profitability and capacity for firms operating between $200 million and $1 billion in AUM.