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The Dawn of Professional Collaboration

The Dawn of Professional Collaboration

Call it what you will – cynicism, disillusionment, enlightenment – an increasing number of clients are no longer willing to tolerate product-centric recommendations masking as financial advice. Increasingly, they are beginning to question the value of investment advice that isn’t tied to their larger financial picture. After seeing their net worth decimated twice in a decade (2000 and 2008), and, for some, their dreams dashed, they’re becoming much more attuned to their most personal individualized goals, important life decisions and overall quality of life.

Moreover, they want all of that reflected in the financial advice they receive. Can you really blame them if they no longer get excited by Monte Carlo analysis or efficient frontier charts?

Make no mistake; they are still as concerned with the return on their money as they are with the return of their money. But, having experienced the roller coaster ride of their lives, they may be turning more introspect about everything they consider important in life – their personal values, their vision of retirement, their legacy desires, their business ambitions,  and their hopes for their children. Are financial advisors really prepared to have that conversation with their clients?

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Towards Professional Integration

The typical high net worth client is surrounded by a small cadre of advisors – a financial advisor, an attorney, an accountant, and, maybe some additional specialists if they own a business – each tasked with solving a different piece of the puzzle for the client. The client is then left with different pieces of the puzzle without a clear picture of how they fit together. We all know what it’s like to try to piece together a puzzle without being able to see the box top. And, because each of the pieces is formed in separate silos, the likelihood is they won’t fit cleanly together if at all, and then the client is left with a discombobulated life plan.

Most high net worth clients are ready for a more integrated approach to their life planning but they don’t exactly know how to go about achieving it. It requires a collaborative process that incorporates the planning efforts of multiple disciplines into a coordinated plan. Put another way, it requires a team approach championed by a professional advisor who is adept at forging effective, working relationships with advisors in other disciplines.

The problem is that, historically, financial advisors, accountants and attorneys have never been much for sharing the same sandbox unless prodded by their clients. Professional envy, mistrust and concerns over client control have fueled some of the tension between the professions. And, as the newest entrant into the professional advisory sphere, financial advisors have had to overcome the perception that they are nothing more than stockbrokers or product salespeople with a bias towards commission sales.

Those perceptions may be changing with the rise of independent financial advisors who have grown their ranks and their stature as clients have grown more cynical of unbiased, product-centric advice. The fastest growing segment of the independent advisory channel are the multi-partner firms that base their client-centric models on a team approach which encompasses all of the planning disciplines their clients need to formulate their life’s plan.

While these advisors generate their revenue primarily from their clients’ assets under management, their overriding focus is to consolidate the complete planning needs of their clients into one synergistic process. To that end, a growing number of firms have established relationships with attorneys and accountants with specialized practices to address the needs of a broad cross-section of their clients.

Today, an increasing number of attorneys and accountants who share the same client-centric principles, and who recognize that the life planning needs of their clients extend well beyond their technical expertise, are reconsidering their business and planning models.  They and the independent financial advisors who are forming collaborative teams are gaining the favor of clients who prefer a more holistic view of their life plan. 

Akhil Lodha Author
Co-founder & CEO StratiFi Technologies

Building the industry standard for understanding portfolio risk through cutting- edge technology at Stratifi.

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