Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Financial Planning > Charitable Giving

The 3 Types of Investors, and How Advisors Can Better Serve Them

Your article was successfully shared with the contacts you provided.

Today’s digital age has brought about a great deal of change in many industries, and the wealth management sector is no exception. Financial advisors, like all businesspeople, need to stay one step ahead of client expectations in order to not only keep those customers, but also win new ones.

Most investors who presently engage with financial advisors fit one of three general profiles:

  • Do-It-Yourself (“DIY”) Investors: These clients are self-driven investors who prefer to create their own financial plans or handle their own investments, and don’t necessarily want to be told what to do by a financial expert.
  • Traditionalists/Delegators: These investors prefer that the financial advisors or certified public accountants (CPAs) they engage take the lead, and manage the work. These clients may wish to look at their plans online with some frequency, and meet with their advisor for the occasional meeting, but are hands-off most of the time.
  • Validators: These clients tend to create a financial plan or goal on their own, and seek validation or feedback from their advisor along the way. But crucially, validators also prefer to review and validate any action an advisor might take beforehand — making them far more collaborative in nature than the other two types of investors.

The cutting-edge financial planning technology solutions currently available in the marketplace can give advisors the tools necessary to understand the needs of these three common types of clients — and provide service and value within the bounds of their desired wealth management experience.

The key to successfully servicing and engaging all of these clients is an interactive, intuitive portal where the clients themselves can — at their own pace and frequency — securely enter personal data, aggregate accounts, and run unlimited scenarios in order to create and implement detailed financial plans that address their individual needs. Advisors can analyze and offer data-driven insights based on the information clients have provided, and make smart data feeds available in client portals to help self-driven clients make more informed planning and investment decisions.

Even if clients prefer advisors to take the lead in managing financial plans and investments, they can log into modern client portals to check the status of their accounts whenever they wish, and from any location, and reach out to advisors with questions through instant messaging. Clients can also access current or archived reports tailored by advisors to address information most relevant to them through client portals.

If a financial planning software platform includes advanced presentation tools, advisors can demonstrate a client’s financial picture and the projected outcomes of certain investment strategies or products using illustration tools, during in-person or mobile meetings. Such presentation tools enable advisors to get down to the nitty-gritty of how investors can achieve their goals, and support their advice with data-backed insights — maximizing the value they provide in meetings with all three types of clients. Furthermore, state-of-the-art presentation features allow advisors to work closely with traditionalists/delegators to craft and begin implementing financial plans and investment strategies.

Giving Independent-Minded Clients Guided & Self-Directed Workflows

Financial advisors should think of themselves as more than just service providers — often, they also act as financial coaches who help investors reach their long-term goals and improve outcomes. Just as professional and amateur athletic coaches watch players during practice and then offer constructive criticism along their way toward peak performance, modern technology enables financial advisors to give clients the tools to work on their own, and step in to give guidance when needed.

Some financial planning platforms are equipped with self-directed workflows that allow investors, in just a few minutes, to run retirement planning scenarios that can calculate how much income they would need in retirement to cover expenses, depending on various circumstances and factors.

Using application program interfaces (APIs), advisors at enterprise organizations and registered investment advisor (RIA) practices can build different types of workflow experiences to suit clients’ preferences. DIY Investors who wish to be left alone to run retirement planning scenarios can be pointed by advisors to a fully self-directed workflow experience. Then, the advisors can follow up to begin in-depth planning conversations regarding the information and scenarios those clients submitted.

For validators who want to work independently but need validation and feedback, advisors can build a guided workflow experience where they can run retirement planning scenarios, but advisors can step in with data-driven insights along the way. A guided retirement planning workflow with comprehensive illustration tools could also help traditionalists/delegators, who normally prefer advisors to manage planning, get their feet wet and gradually become more comfortable taking a more proactive approach to running scenarios and managing plans or investments.

More than 90% of high-net-worth investors prefer a combination of advisor-directed and self-directed resources to assist them through all points in the financial planning process, according to the 2017 Capgemini World Wealth Report. When choosing a financial planning technology solution, advisors should check that prospective programs offer both resources, and enable advisors to tailor them to the three different investor profiles.

Anthony Stich is chief operating officer of Advicent (, the financial planning technology provider of choice for over 140,000 financial professionals across more than 3,000 firms worldwide. 


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.