Holistic Goal Based Planning Biggest Trend In Wealth Management


Advisors should shift toward a goals-based planning approach that guides their relationship with clients across the complete client life cycle, according EY’s 2014 Wealth Management Survey.

EY’s third annual Wealth Management Survey has been published after surveying financial advisors and clients in four markets, viz.: the U.S., Canada, Brazil and Mexico. The survey also points out wealth transfer as the other most relevant trend driving the industry.

Key trends influencing the industry – Holistic goal

The survey points out that holistic goal-based planning is the biggest influencer when it comes to where clients invest their assets. As can be deduced from the following exhibit, 45% of clients believe holistic goals-based planning is the most important influencer:

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Wealth transfer is another important trend driving the industry. As can be seen in the following graph, generational wealth transfer and succession planning are key risks to growth, besides regulation:

Wealth transfer Holistic Goal

However, the survey points out both advisors and clients view wealth transfer as an attrition driver, suggesting firms still have work to do to realize the opportunity, or mitigate the risk, posed by generational wealth transfers.

Traditional channels still score

Interestingly, the survey points out traditional channels and not newer outlets like social media carry the most weight with clients. The survey suggests advisors consider revisiting marketing strategies to align with clients’ preference for more traditional channels. The following graph highlights almost 90% of all clients cite referrals as the main way to learn about advisors, evidence of the importance of word of mouth from clients and centers of influence:

Marketing strategy Holistic Goal

The survey highlights that clients value a firm’s reputation and trust more than an advisor’s reputation when choosing wealth managers. The following graph captures the trend:

Factors driving acquisition Holistic Goal

As can be deduced from the above graph, clients and advisors differ on key drivers of client acquisition, thereby providing areas of opportunity.

Portfolio performance – the key issue

The Wealth Management Survey highlights that with the financial crisis fading away, portfolio performance has become the most important issue again. As revealed in the following graph, while clients say portfolio performance is the most important issue, the advisors highly overestimate the impact of their relationship with clients on retention:

Portfolio management - the key Holistic Goal

Focusing on the service channels, the survey points out that despite generational differences, digital channels rank lower for both clients and advisors:

Service Channels Holistic Goal

The Wealth Management Survey concludes that to successfully capitalize on the opportunities presented by changing landscape, firms will need to change and adapt their operating models and strategies while dealing with the pressure of increasing regulation and decreasing margins.