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January 26, 2022 at 02:38 PM
What You Need to Know
- The shift to a unified managed household approach to client and prospect engagement will continue to gain momentum.
- Once this platform is in place, advisors can understand the relationships between people more clearly.
- Automated insight delivery will enable advisors to take action in real time.
The disruptions and uncertainty of the past two years have taught advisors and their firms to expect and embrace the unexpected. Amid this ever-changing environment, advisors find themselves in an endless quest for technologies that offer a competitive advantage as they race to deepen relationships with clients and increase the assets they handle.
With this in mind, we expect these wealthtech trends to come to the forefront in 2022:
1. The household view will become the industry standard.
The shift to a unified managed household (UMH) approach to client and prospect engagement will continue to gain momentum. By looking at a client’s entire “household” — that is, organizing data in a way that captures the financial lives of all associated individuals — the advisor and their team easily can see the business story they need to succeed.
For advisors, understanding the constituents of a household provides a basis for having a comprehensive goals-based financial conversation.
In dealing with clients, methodologies that identify related accounts automatically (prior to confirmation by the clients themselves) often is a means to impress them with the firm’s sophistication, and thus facilitate further asset gathering.
By contrast, asking people to perform such identification is often perceived as ignorance on the part of the firm. Therefore, developing and maintaining logic for grouping accounts into households is a critical activity.
Financial services companies are hampered by data providers that report financial information at the account level. And simplistic determination of household relationships using tax identifiers, surnames, addresses and/or marital relationships often does not grasp the nuance in identifying broader financial relationships. Related accounts may be a mix of individual accounts, business accounts, and accounts for entities such as trusts or estates. They also may include both immediate family members and members of an extended family.
2. High-quality data integration will separate the winners from the losers.
Integrated technology has the power to drive exponential growth, but outdated and inflexible platforms can hamstring advisors. In an increasingly competitive space, advisors need accurate, up-to-date, complete information to allow for faster decision-making.
Indeed, the only way to realize the promise of a UMH approach is to have in place an integrated data backbone that synchronizes financial and personal information uniformly across multiple account types and investment vehicles.
