Customization Frames New Approach to Serving Wealthy Clients

Dana D’Auria

What You Need to Know

Many advisors are focused on winning affluent clients while needing to meet very high service expectations.
Delivering significant personalization at scale is made easier with good technology and solid partners.
One trend is to use outsourcing for more straightforward aspects of account management.

How financial advisors are winning and serving their most affluent clients represents one of the most exciting and innovative areas of ongoing disruption in the wealth management industry.

According to Dana D’Auria, co-chief investment officer and group president at Envestnet Solutions, the question of how to provide greater personalization at scale for such clients is among the most important considerations for advisors working in this space — and indeed for advisors working with all manner of clients.

To this end, D’Auria said, Envestnet has invested heavily in its own approach to supporting advisors as they serve the high-net-worth and ultra-high-net-worth client segments. To summarize the work, she said that Envestnet is willing and able to do “a lot more” of the needed oversight and client hand-holding, thereby freeing up wealth professionals to focus on the core tenets of relationship management and business development.

Another related trend, according to D’Auria, is advisors’ growing willingness to use different service models depending on the exact needs and expectations of their clients. In many cases, advisors are finding they can focus more internal staff and resources on their more demanding clients, and they can lean more on technology and third-party outsourcing to manage more straightforward cases.

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“We are actually seeing a lot of demand for client service support at both ends of the wealth spectrum,” D’Auria said. “So in that sense, it’s almost a barbell of automation that is emerging.”

‘Personalization’ Isn’t New, but ‘At Scale’ Is

As D’Auria recently told ThinkAdvisor, “there is obviously a lot of focus on customization” in wealth management.

“The way I think about it is to remember that personalization itself is nothing new,” she said. “It’s the ‘at scale’ discussion that is new. … Today, it goes without saying that someone who is paying for the services of an advisor is going to expect some level of personalization.”

As an example, D’Auria noted that advisors have been making an effort to link their clients’ investment approach with the tax management effort for many years. In the past, however, advisors could support a more limited number of highly wealthy clients with this type of service, because they would have to run complex calculations about portfolio positioning and the best method and timing of rebalancing.

“Today, technology is front and center in this effort, and we are working toward a point where we can have a universal tax overlay on the advisor’s platform,” D’Auria said. “We can do algorithmically what had to be done by hand on a spreadsheet in the past, and that fundamentally changes the advisors’ ability to deliver these services at scale.”

As noted, this approach frees up advisors’ time to focus on growing their business and deepening existing client relationships with discussion focused on goals and aspirations — not the minutia of tax transitions.

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“They aren’t spending so much time on something that is better done by a computer anyway,” D’Auria said.