Embracing the future: How advisors can help their clients plan for major life events

Life is an unpredictable journey filled with milestones and significant life events, such as marriage, purchasing a home, starting a family, and retirement. Preparing for these pivotal moments requires sound portfolio management, informed decision-making, and personalized guidance.

As we step further into the digital age, financial advice technology has emerged as a powerful tool, revolutionizing how advisors help their clients prepare for and navigate significant life events and timelines. More financial institutions are making digital improvements to their business, and with those improvements comes a shift toward a more personal and customized approach to advisory services.

Here, we explore the role of financial advice technology in helping clients better prepare for these life-altering moments.

A holistic approach

More RIAs seek to provide holistic and superior advice to more client segments. The rise of financial advice technology enables users to aggregate data, apply specific goals and preferences, develop tailored investment strategies, and personalize portfolios with a holistic approach that helps strengthen client relationships and truly understand their life and retirement goals.

Householding can generate a more holistic client conversation, from an individual level with multiple account types, to one consisting of family relationships and intergenerational wealth. Data aggregation, rebalancing, and integrated trading are vital to shift effectively to householding. Reviewing a client’s risk profile holistically across all accounts within a household is also crucial to assess the proper alignment between risk tolerances, preferences, and capital gains budgets.

Risk assessment and mitigation

Life events are fraught with uncertainties, so monitoring and mitigating potential risks is critical. As advisors coach their clients through buy-and-hold and goal-based strategies, they will need to assure them of the choices made while quickly aligning portfolios to changing risk tolerances, preferences, and life plans. Providing value-added services and gaining better control of the key levers can enable advisors to reliably improve investor outcomes such as reducing costs, managing risk, and minimizing taxes.

The technology decisions a firm makes will make or break its ability to appropriately manage asset allocation and risk for their clients and react quickly to their changing goals and circumstances. Advisors must be able to view positions across accounts, risk profiles, and aggregated model targets and determine the drift per asset class and security.

Personalization and scalability

More clients want a level of personalized financial advice that was previously limited to institutional and affluent investors. To meet these growing demands, firms must have a scalable approach to understand and anticipate client requirements while delivering a top-notch experience, regardless of the assets under management (AUM). Across the client lifecycle, from client acquisition to growth and sustainment, technology can allow advisors to deliver custom experiences and differentiated services.

A recent Wealth Management Consumer Report by Accenture revealed that more than half of the investors surveyed felt the advice they receive is too generic, and among high net-worth investors with $10 million or more in personal wealth, that percentage jumped to nearly 90%. The report also said 34% of investors would increase their investments if they received a hyper-personalized experience.

Winning and retaining new clients is driven by personalization. As today’s investors demand tailored models that fit their preferences per rules and exceptions, advisors must be adaptable and able to personalize and tailor models to their clients’ situations and explore what-if scenarios to better position their clients for the future.

Continuous monitoring and adaptation

Shifts in personal circumstances and financial priorities often accompany major life events. Financial advice technology allows for continuous monitoring of clients’ financial situations and adapts strategies accordingly. Whether it’s a job change, a birth, or a market upheaval, promptly adjusting investment portfolios is critical to keep clients on the path to success.

A centralized trading infrastructure with efficient workflows for order review sets, trade blotters, and order archives can greatly impact an advisor’s effectiveness in taking immediate action on model drifts from anywhere in the system. An advisor must be able to view positions across accounts, risk profiles, and aggregated model targets and determine the drift per asset class and security across the household. A rebalancing solution should be able to suggest trades on drift and enable the advisor to quickly see potential tax consequences across the overall household in a single portfolio.

Automation and efficiency

Time is a valuable asset, and financial advice technology and outsourcing can help streamline processes while reducing administrative burdens. Today’s shrewd advisors need solutions that help reduce the complexity of meeting modern and evolving client needs while improving productivity across the front, middle, and back offices.

Delivering a high level of tailored investment and portfolio services relies on the right rebalancing and trading technology to meet complex needs, simplify that complexity, and scale efficiently across the entire client base. Providing sophisticated order management and rebalancing capabilities in the same platform enhances operational efficiency and risk control, saving the firm time, effort, and risk of errors or delays. FIX connectivity, direct interfaces with various brokers’ proprietary trading algorithms and strategies, and live order status notifications can help to amplify trading and operational efficiencies even further.

A rebalancing solution should provide aggregate data and model targets, support desired imports and ultimate output, and scale efficiently enabling the firm to bring on more clients and give each the same high-quality service without the additional overhead. The solution should also fit within your technology ecosystem and integrate with portfolio accounting, client relationship management (CRM), and other platforms to drive efficient communications between your teams and better position your firm to deliver a best-in-class, customizable experience for your clients.

Meeting the moment

Financial advice technology has emerged as a game-changer, empowering advisors to better help their clients prepare for major life events. Rebalancing, trading, and expertise play vital roles in an advisor’s ability to minimize risks and help clients pursue their life aspirations with greater confidence and peace of mind.

Finding the right technology is crucial to your firm’s ability to acquire and delight clients, operate cost-effectively and efficiently, and scale to growth—and uncover opportunities to guide clients to meet life events and the moments that matter most.