Thoughts on the purpose and value of financial advisers

The pontificated demise of the full-service financial adviser is once again gaining traction as Walmart and Google move to launch technology-driven financial services start-ups aimed at millions of potential customers who don’t have a relationship with a bank or a financial adviser.

With this latest technology evolution in our midst, it’s only natural for us to speculate how this could affect the adviser. Advisers need to stay very close to their clients, as there is fiery and relentless competition lurking out there from robo-advisers.

Although the competition I refer to has different business models than ours, they are nonetheless very astute at chipping away at client assets. Make no mistake, our competition is clever and often effective, with enormous marketing through countless channels that end up surrounding and connecting with many of our clients. Part of the marketing is emotive. So how do we compete?

I believe a large part of our strategy and solution here is personal, interactive and comprehensive financial planning, getting and staying close to our clients to the point that we can even “finish their sentences,” and also developing deep relationships (cemented in knowledge and trust) with our clients’ families and next generation. It is imperative we continue to excel at all three of these behaviors to continue to thrive.

Fortunately, we’ve built Edwards on a planning foundation to include a deep bench of planning experts who can meet a variety of clients’ financial needs. Our technology integrates with other firm systems and allows collaboration with the client.

We also have a large number of advisers with a financial planning certification and other advisers are working toward meeting the certification’s rigorous planning standards. Clients need and desire planning. If we don’t continue to reinforce the planning relationship, another adviser will. The client will find this, as a motivated patient would find a physician with a specific expertise. It’s human nature.

Our emphasis and commitment to planning and effective relationship building is a strong and necessary step in the right direction, which causes my optimism to reach new highs. Competition is fierce in every industry, yet collaborative and effective planning, as well as deep relationship building, can’t be outsourced.

NEXT STEPS

Advisers who practice qualitative behaviors (in my view) will thrive in their current and future practice; those advisers who don’t embrace planning and fail to invest in and develop deep relationships with their clients’ family and next generation, will undoubtedly struggle. There are occasional exceptions to this, yet these exceptions will become rarer and rarer as time goes on.

Clients who receive such enormous value rarely initiate discussions on prices and fees. Fee discussions become almost nonexistent. High-value propositions almost always lead to fees being less significant.

The higher the perceived value from the client, the less relevant fees become.

The ball’s in our court, and I see a super bright future ahead.

Tad Edwards is chairman, CEO and president of Benjamin F. Edwards in St. Louis.

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Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.

Andrew Vincent
Andrew is half-human, half-gamer. He's also a science fiction author writing for BleeBot.
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