Charles Schwab’s recent announcement that it’s giving retail investor clients a free financial planning tool is the latest wake-up call to advisors that they should review their client service and consider upping their game as multiple industry players digitize more processes, industry watchers say.
“The news is yet another reason advisors need to worry about the future of their businesses and need to pivot ASAP to [provide] an enriched service offering that emphasizes their professional approach beyond investing,” said Tim Welsh, head of the consultancy Nexus Strategy. “Once again, Schwab is taking away yet another aspect of their value proposition,” he added.
Others agreed. As robo-advisors and huge industry players like Schwab “keep moving” into the areas previously dominated by financial advisors, “advisors need to think like sharks and keep swimming or drown,” said Craig Iskowitz, head of the consultancy Ezra Group.
This means offering more advice, specialized financial planning, alternative investments and/or distinctive services for a particular client niche, like retired pilots or bass fishermen, Iskowitz explains.
“You have to offer the best service to survive,” he said, and that means surpassing “what Schwab is giving away for free. It’s about finding your niche and then excelling at it.”
In a climate in which there’s a lot being given away, the question becomes, “What do you offer?” Iskowitz asked. “The answer is better value … . You’ve got to explain and justify your value proposition or you’re out of business.”
Others agree. “Advisors who get it and that have seen what’s coming with technology like this, they shouldn’t be worried,” said Gavin Spitzner of Wealth Consulting Partners. “Those who have a specialized practice and recognize their value is behavioral coaching and life planning won’t have any issue with this.
“Those advisors who ‘get’ their value to clients are focusing on delivering what cannot be digitized, and that’s the key,” Spitzner explained. In other words, it pays to think strategically and also emotionally — via approaches based on behavioral finance and that entail empathy — as much more competition and further digitization are expected.
Since the start of the COVID-19 pandemic, many financial advisors have done just that in a variety of compelling and innovative ways.
We highlight the stories of nine who’ve gone above and beyond for their clients in the midst of highly challenging circumstances:
- How an Advisor Saved a Winemaker From Disappointing His Workers
- 3 Clients Wanted to Cash Out. Their Advisor Talked Them Down.
- A Flight Attendant’s Dilemma: Take a Pay Cut or Retire Early?
- How an Advisor Helped a Laid-Off Marketing Exec
- How an Advisor Saved an Energy Exec From a Big Investing Mistake
- How an Ex-Cop Turned Advisor Takes Care of First Responders’ Finances
- How to Handle Clients Who Lose Jobs in the Pandemic
- Melissa Joy on ‘Triaging’ Clients’ Financial Issues From Home
- How an Advisory Firm Helps Grounded Pilots
- Why Planning-Led Advisors Are Better Positioned in a Pandemic