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Just 22% of Advisors Charge for Financial Planning

Advisors that offer comprehensive services can also manage four times more in assets than their peers, according Cerulli Associates.

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A little planning goes a long way. 

Financial advisors that specialize in comprehensive wealth management have larger average client sizes and assets under management than those providing financial planning on a case-by-case basis, according to a new Cerulli report. That emphasis on financial plans may even help firms manage four times more assets than their peers, according to the research. While that sounds too good to be true, just 22% of the industry charged for financial planning this year. 

“Financial planning and advice services are now a vital consideration for investors when choosing an advisor,” Cerulli associate director Andrew Blake said in a release.

Make a New Plan, Stan

Getting personal with clients’ lives also allows advisors to improve existing relationships and gives them a chance to gain walletshare, according to the report. An expanded menu of services — including tax management, insurance, and basic estate planning — provides insights into held-away assets that might be better suited in advised accounts. 

Advisors can start by outsourcing tasks, like portfolio management through model portfolios, to begin expanding their services, Blake said. Partnerships with outside firms and technology can also help fill any service gaps.

“Technology will play an increasing part in the financial planning experience,” Blake told The Daily Upside. “How smaller firms, in particular, prioritize their tools and support is going to be important.”

Half of investors surveyed said they value an advisor who looks at their entire financial picture, and 46% identified investment performance as extremely important. The report also found:

  • While new technology is necessary, firms should take a gradual approach.
  • Advisors should be selective with technology adoption and not overcomplicate workflows.
  • Firms can leverage partnerships where possible to help outsource tasks.

Take It Slow. Prospective clients want their advisors to get involved, but change can be difficult — especially in the wealth management industry. Blake recommends firms start with a few new tools so they don’t “inundate” advisors. An overly aggressive approach to new tech could turn advisors off altogether. 

“It’s better to really understand what tools are most appropriate for that specific firm, and try to drive higher adoption,” he said.