Financial advisers could improve their value proposition by offering a ‘one stop shop’ for clients to reach other services such as accountants and solicitors.
In a report into the established affluent demographic, those high-net-worth clients with an estimated $4.1 trillion in household wealth, Netwealth found there were multiple different specialists used by these types of clients.
Netwealth said financial advisers broadening the ecosystem beyond advice could generate new revenue streams and build deeper client relationships.
This included working with accountants, tax advisers, lawyers, philanthropic experts, aged care specialists and stockbrokers.
Expanding the ecosystem in this way could be done by hiring appropriate resources, training existing staff, buying the skills through an acquisition and build close partnerships with existing companies which could create a referral stream.
Speaking to Money Management, Andrew Braun, general manager for marketing at Netwealth, said: “The ecosystem is a really important part of the value proposition. Clients have complex needs across cashflow, debt, tax, property and health.
“What we have seen is some advisers are taking on the role of a concierge where they will take clients’ questions and then have preferred partners to work with and then it becomes a referral system where they can build that network.”
Meanwhile, the report also found clients expected to rely heavily on their advice to implement their financial decisions. Just 5% of clients said they would want to make their own decisions and use an adviser for compliance purposes.
The highest proportion, 35%, said they would “rely strongly” on their financial adviser as a critical source of information and decision-making while 26% said they would “partially rely” on them to provide information and explanations of their financial affairs.
The report said: “In behavioural terms, we can see that established affluents exhibit both ‘outsourcing’ behaviour – preferring their financial advisers to make critical decisions for them – or ‘coach-seeking’ behaviour – preferring them to validate (and challenge, where necessary) things they may already be thinking or decisions they may already be considering.
“We suspect that this is driven by the fact that many established affluents are time-poor. Most are still working in some capacity and so do not have the time to manage their financial affairs effectively. Further, they have high advice propensity, and as such are heavy users of other types of advisers, so they have good levels of established trust with advisory services.”
