Tech Is Helping Advisors Meet (And Exceed) Client Expectations

But how do firms do it? They’re financial planning professionals, not tax, healthcare, or estate experts. If large firms are hiring in-house experts, what can small and mid-size firms do to not get left behind and lose clients because they can’t meet the high expectations of clients?

Luckily, we’re in an age where technology will help.

Using technology to add unique services

For financial planning professionals who want to offer comprehensive financial planning, meet client expectations, and stand out from peers, bringing value-added services into their offerings via technology partners has been a competitive advantage.

Choosing the right technology partner allows financial planning firms to expand their service offerings without stretching their teams and budgets thin. Best of all, offering just one value-added service will meet client expectations – but offering several? That’s how you exceed client expectations and stand out from the competition.

Tax planning

Edelman Financial Engine’s 2022 “Everyday Wealth in America” report found that, among the unadvised, 21% were most interested in receiving tax guidance from financial planning professionals. Among those with $500,000 in assets and up, the interest in tax guidance went to 40%. Other studies have found that 92% of those surveyed expected tax planning advice from their financial planning professional, but only 25% of clients received that service. Unsurprisingly, not meeting client expectations has consequences. This is partly why the adoption of tax planning has been high among financial planning firms over the last few years. One LPL Financial study found that top advisors were 41% more likely to offer tax planning and strategy.

Some firms choose to hire an in-house person, or even a whole team, to offer these services. This can be a great option, but several technology partners are also available as a tax planning solution. Companies like Holistiplan, Corvee, and NaviPlan, for example, make it easier for financial planning professionals to offer tax planning. It has grown as a popular value-added service for comprehensive financial planning, as evidenced by the 25,000 advisors on Holistiplan’s platform alone.

But tax planning isn’t the only non-investment service clients want.

When asked which areas were of greatest concern for their clients, the top responses from financial planning professionals had tax burden and healthcare costs tied at 95%. That leads us to our next value-added service advisors can offer in-house via technology.

Healthcare planning

This is the comprehensive overview and optimization of clients' present and future healthcare costs based on personalized needs and budgets. Healthcare planning is the practice of finding cost savings opportunities at multiple points in a person’s life as they relate to health care. Healthcare planning can be as complex as an analysis of different plan options and how each plan works with a client’s health needs, budget, and other important factors, or as simple as a conversation about how best to use a client’s health savings account (HSA) funds.

There’s a great opportunity for financial planning professionals to differentiate themselves by offering a unique service offering before it becomes more widespread. Beyond that, healthcare costs are a top concern for clients of all ages. In 2022, 47% of clients reported feeling “somewhat” or “very concerned” about issues relating to health care. Healthcare costs and picking the “right” health insurance option are concerns among clients, and that alone means it’s worth addressing in financial plans.

But if that wasn’t enough, clients expect healthcare planning from their advisors: 85% of Generation X, 91% of Millennials, and 97% of Generation Z expect their advisor to offer products that provide protection against future events or that can meet a specific and targeted need outside of asset growth, like insurance products. And 40% of respondents reported they're looking for insurance advice as a product/service beyond core investment management. Even other financial planning professionals anticipate conversations about healthcare expenses and long-term care expenses to increase more than other topics over the next five years.

Health care is a complicated topic and a complex industry, which is why few financial advisors offer this service. But those advisors are also likely unaware that there is technology available to take the heavy lifting out of healthcare planning.

My recommendation is to choose a third-party technology partner that is not affiliated with any service provider and that offers unbiased and highly personalized healthcare planning services for clients. There are several “tech-enabled” Medicare agencies available, but most of them sell insurance plans. This means the guidance clients receive could be biased, and the options presented to clients will be limited if the vendor isn’t authorized to sell all the available plans in each area or doesn’t want the overhead of doing so. Choosing a healthcare planning software company that doesn’t sell plans ensures your client receives an accurate, unbiased, and highly personalized analysis of their optimal health plan options.

The advisory profession has trended towards fee-only advice, and your healthcare planning should be no different. Check out some of the options on the Kitces tech map, which is a new category as of only a few months ago. Further, healthcare planning will have a presence for the very first time in 2024’s T3 survey, so be sure to look out for that category!

Estate planning

A CEG Insights study found that 93% of those surveyed expected their advisor to help with estate planning, but only 22% received that service, and 94% expected to receive trust services, but only 10% did. The LPL Financial study I mentioned earlier also found that top advisors were 53% more likely to offer estate planning. Even financial planning professionals report seeing an increased interest from their clients in estate planning. One survey found that 34% of financial planning professionals said clients were asking for estate planning as part of a more comprehensive range of non-investment services.

To exceed client expectations without hiring an in-house estate planning expert, you have several technology partners to choose from for this service. Trust & Will, Estate Guru, Wealth.com, and Vanilla are just a few of the available options.

Like healthcare planning, there are a few life events financial planning professionals can use to bring up estate planning. Getting married and having children are both great opportunities to bring up estate planning. You could also bring up estate planning after your initial meeting with a new client and present it as a basic component of a secure financial plan. Alternatively, tax season can also be a good time to incorporate estate planning since clients are already in “paperwork mode.”

Final thoughts

Among high-net-worth clients, 32% leave their financial advisor because they didn’t discuss their full financial situation, and 60% of clients leave because they felt their needs weren’t being listened to. Based on the data in this article, there’s a clear picture that the “full financial situation” and “needs” clients want their advisors to listen to go beyond basic financial planning. They want help with tax planning, estate planning, healthcare planning, and much more. To stand out from competitors, meet client expectations, and offer truly comprehensive financial planning, adding valuable, non-investment services is a must. But your time is limited, and your expertise and knowledge can only go so far. That’s where technology comes in to support you. With the right technology partners, financial advisors can do it all without being stretched thin, and they can exceed client expectations.

Although she's years away from her own retirement, Christine Simone is obsessed with helping current and future retirees plan for and optimize their healthcare costs. She's held notable leadership positions within the healthcare industry, working with key stakeholders from payers to providers to the Veterans Affairs. Now, Christine is the CEO and co-founder of Caribou (www.caribouwealth.com), a software solution for the finance industry. She's driven by her passion to slash hidden incentives in healthcare to support smarter financial decision-making, and she is within the fraction of women founders who have raised venture capital. She can be reached at [email protected].

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