As the complexity of individual finances continues to grow, the role of financial and wealth advisers needs to evolve with it.
The days of advisers simply acting as intermediaries between clients and financial products are long gone.
Today, the creation, management, and protection of personal wealth are integrated and fluid processes, where different components overlap and depend on each other.
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While the financial services industry has adapted to the evolution of wealth management, financial advisers often remain stuck in old silo mentalities, solving individual needs with individual products instead of taking a holistic, integrated approach.
Clients, particularly those at the more affluent end of the financial scale, are becoming frustrated and disillusioned with this traditional ‘silo’ approach.
They expect integration not only in their wealth management aspects, but also in the advice and guidance they receive. In response to this demand, a new professional role is emerging in financial services – that of the integrated adviser.
While an integrated adviser cannot be an expert in all aspects of wealth creation and management, these professionals must invest the time and expertise to fully understand the entire context in which their clients’ wealth creation efforts occur.
Comprehensive view
They must have a comprehensive view of that context, recognising how every action relates to other aspects within the individual’s wealth ecosystem.
Moreover, they should have the insight and networks to act as true intermediaries, linking each need to an appropriate solution or specialist for individuals, their family and where applicable business.
For integrated advice to be of relevance and value it needs to reflect all the financial aspects of a client’s context – across their individual and family spectrum including banking (flow activity), lending, investments, insurance and estate planning.
The value of having an advisor with an integrated defined view of each individual’s family goals and crafting strategies to attain them whilst monitoring/tracking and adjusting over time is incomparable.
To be effective as an integrated adviser, these professionals must possess certain characteristics. At FNB Private Banking, the following five ‘Ps’ are considered non-negotiable for effective integrated advice:
- Proficiency: Integrated advisers must possess a mastery of their craft. This includes having a strong foundation of technical knowledge in financial services to navigate complex concepts and strategies. They must also be able to effectively communicate complex concepts to clients, ensuring clarity and understanding, and actively listen to clients’ needs and concerns, displaying empathy and adapting their approach accordingly. High emotional intelligence is vital to enable them to manage their own emotions while understanding and empathising with those of their clients. Curiosity is another valuable trait for integrated advisers, as it drives them to seek a deep understanding of each client’s unique circumstances, goals, and aspirations. By asking insightful questions and gaining comprehensive insights, they can develop personalised strategies tailored to their clients’ specific objectives.
- Perspective: Integrated advisers need the right mindset – one that is client-centric rather than product-focused. They should possess clearly defined, values-based beliefs and principles, maintain objectivity, offer an unbiased viewpoint, and be transparent about their knowledge, expertise, and abilities across all areas of financial services. They should also be willing to connect clients with the necessary expertise and skills when needed.
- Process: Dealing with high volumes and diverse clients requires a clearly defined, well-tested approach. Such a systematic approach ensures that every client receives the attention they deserve. Using a goal-based approach, advisers can understand each client’s context and goals, connecting them to specialised solutions and approaches to help them achieve those goals. Often, clients don’t have an immediate idea of their goals, and the effective integrated adviser is one that can also help them define their goals and create and track the plan that works to get them to those goals. The tracking aspects is of paramount importance. It’s an area where financial advice has received a bad reputation in the past and the effective adviser is one that stays in touch with clients and regularly tracks their progress, making adjustments to their plans as they go.
- Prudence: Advisers interact with a diverse range of individuals, each with their own unique expectations and requirements regarding the handling of their information. In this context, discretion and trustworthiness are paramount. Clients must feel confident that their adviser will maintain confidentiality and safeguard their sensitive financial details. At FNB, prudence is further underscored by a conservative approach to advising. This approach does not imply limiting clients’ potential for wealth growth; rather, it reflects a commitment to protecting their interests. The prudent adviser understands that financial decisions have long-term consequences and seeks to provide advice that prioritises the overall wellbeing and stability of their clients. By exercising prudence, advisers aim to prevent clients from making ill-conceived or poorly informed decisions that could potentially jeopardise their wealth. They prioritise responsible decision-making, ensuring that clients can navigate their wealth journey with confidence, knowing that their adviser has their best interests at heart.
- Platform: As the world digitises at an accelerated pace, technology has become vital for effective financial planning. Integrated advisers must embrace technology and leverage its full potential to benefit their clients, utilising digital advancements to enable their plans.
While an integrated adviser cannot be everything to everyone, they can and should be qualified, competent, and committed professionals who have the ability to see the bigger picture of an individual’s and their family’s wealth situation.
They need to be able to provide access to an ecosystem of specialists and solutions, ensuring seamless collaboration to help clients achieve their wealth creation, protection, and management goals.
Eric Enslin is CEO of FNB Private Banking and Advisory.
