We don’t know how to tell you this, but your clients are seeing someone else.

While advisors traditionally strive for exclusive relationships, global investors work with an average of 2.3 wealth managers, according to a recent Ernst & Young report that gathered data on 3,600 advised clients ranging from the mass affluent to ultra-high-net-worth channels. In addition to an RIA, a client might work with a robo-advisor, private bank representative, tax specialist or financial coach. Coupled with the rise of self-directed trading, advisors aren’t just competing against rival firms, they’re competing against their own clients for wallet share. Instead of aggressively fighting to pull those assets back in-house, however, advisors may simply need to accept this branched reality.

“Ten years ago, advisors would hide behind the idea of, ‘If I’m an RIA, I’ve got to have 100% of your wealth or I can’t be a fiduciary,’” said Laura Varas, founder of investor data firm Hearts and Wallets. “No one believes that anymore. It was ridiculous then, and it’s ridiculous today.”

I Want It All

Over the past decade, client demands have ballooned as their assets grow. Beyond core portfolio management, clients want tax, estate, retirement planning and more. And they might not wait around for a single firm to build it all.

“Client expectations are rising at a time when relationships are becoming more fluid and more competitive,” Jun Li, head of EY global wealth and asset management, said in a statement. “Clients today are more engaged, more informed and more willing to act when they do not see clear value.”

The EY report also found that:

• Some 45% of wealthy clients plan to move between 25% and 50% of their assets away from a current wealth manager in the near future.
• More than a quarter of assets are already in self-directed accounts.

Clients are also getting more confident in their abilities to manage their finances or seek help beyond a sole advisor. The Covid-19 pandemic introduced myriad self-directing tools to a new wave of investors, and millennials and Gen Zers are trying to avoid any retirement planning mistakes their parents may have made, Varas told Advisor Upside. As a result, many Americans are naturally splitting their assets.

“People don’t just go to Stop & Shop,” Varas said. “Sometimes they go to Whole Foods, the deli or order online. Pitching people on consolidating who don’t want to is only going to irk them.”

The Multi-Advisor Model. Some advisors have already begun adapting to this multi-store environment and leaning into collaboration. “Many of our clients work with multiple advisors,” said Joon Um, a CFP with Secure Tax & Accounting. “We’re often the tax advisor working alongside their financial advisor or estate planning attorney.”

Clients are showing up to meetings with enough AI-generated questions to make Ken Jennings proud.

Conversations are expanding beyond traditional investing topics to touch on transferring wealth, financial anxiety, life decisions and broader economic concerns, according to a new survey from Edward Jones. More than a third of advisors surveyed said clients are comparing their advice to recommendations received online or through artificial intelligence tools. As clients become more educated about their finances, advisors have the opportunity to have deeper discussions that ensure clients are not only more informed, but more confident in the decisions they make.

“Advisors who work with clients using AI will spend less time doing very basic education,” said Phil de la Motte, an advisor at Prospero Wealth. “We’re going to get to spend more time having more sophisticated conversations, and ultimately getting to better decisions more quickly.”

I’ll Take Roth Conversions for $1,000

AI can be useful for achieving a higher level of analysis faster, whether that’s led by advisors or clients themselves, said Rick Nott, senior managing director at Angeles Wealth. Sometimes clients will come in already having run their own analysis and can request a certain strategy, or they’ll spend time researching in between meetings and will come back with more nuanced questions.

After suggesting a strategy, Nott said clients often come back with deeper questions about what it means for their financial picture. Other examples include:

• Clients sometimes proactively bring up tax-planning opportunities with Roth IRAs, or do their own research, he said.
• When making decisions about real estate, some clients come to meetings having already done a deep analysis of the finances, and are able to then go through the model together with their advisor.

Make It a True Daily Double. AI can be useful in building a client’s confidence about a strategy that the advisor suggested, De la Motte said. He recalled a client who was rather risk averse, and wanted to run a strategy past him. De la Motte crafted a very specific prompt based on the client’s situation, and asked him to run it through his favorite chatbot. “He ran it and said: ‘Wow, that was really useful. It saved me some time, it saved me effort, but also it gave me confidence … I just feel more confident about what we’re doing.’”

Sorry to alarm you, but one of the biggest expenses your clients will face in retirement is going up.

The average 65-year-old retiring in 2026 will need approximately $185,500 to cover future healthcare expenses, according to a new report from Fidelity. That’s up 7.5% from last year, the largest jump in more than a decade.

Time to panic? Not necessarily, say advisors. Costs for healthcare in retirement have always been high, so Fidelity’s latest projection isn’t exactly surprising, and there are reliable methods for meeting the challenge. Contributing to and investing within health savings accounts is one sound strategy. Clients should also carefully consider decisions about Medicare and Social Security claiming, while withdrawals from 401(k)s and IRAs should be organized as part of an overall tax-management strategy. Bottom line: Planning ahead can make sky-high healthcare costs much more manageable.

Hey, Big Spender

The key to confidence about healthcare spending in retirement is creating an individualized plan that recognizes a person’s unique circumstances, said Davi Kutner, partner at Aprio Wealth Management. “Spending $185,000 on healthcare in retirement looks a lot different if it’s over a period of 30 years or 15 years,” Kutner said. “What worries people is that they have no idea how long they’ll need their money to last. That’s really where the value of working with a skilled financial advisor is.”

When a good long-term plan is put in place that balances risk and return, Kutner said, people can afford to pay for care in retirement, especially when factoring in Social Security and Medicare benefits. “Even in cases where long-term care is needed, people spend a lot less on things like travel or going out to eat. The numbers are scary in isolation, but it’s important to understand the context.”

So, how do those costs break down? According to Fidelity’s research:

• Medicare Parts B and D premiums comprise 45%.
• Medicare co-payments, co-insurance and deductibles represent 48% of spending.
• Out-of-pocket prescription drug expenses round out the final 7%.

Make a Plan. Ron Mastrogiovanni, CEO of the health spending analytics company HealthView Services, said his firm’s latest research aligns with the Fidelity report. One important caveat, however, is that their numbers are averages. Actual spending varies a lot depending on location, health status and coverage decisions.

For example, a 65-year-old Missouri couple living to 85 (husband with high cholesterol) and 82 (wife with type 2 diabetes) has anticipated lifetime costs of $713,000, per HealthView Services data. They would actually spend more (about $1.01 million) if they were healthy and lived to age 88 and 90, respectively, because of additional years with higher annual premiums and late-life long-term care needs.