by Philip J. Statz, RFC
This article attempts to explore a dynamic twist on the growing trend of wealth management and collaborative planning. It identifies a process for continual change and notes examples and benefits of what this type of relationship can create.
I can still remember embracing the concept of collaboration at our annual firm meeting. Collaborative planning through wealth management services was where it was at—the pinnacle of planning—benefiting the client, our firm, and the other professionals we worked with. We would become an "open architecture" kind of firm, willing to work with numerous specialists and not just a chosen few…all for the benefit of the client. I felt refreshed and renewed for our upcoming planning meetings. No more would we approach planning in our old method: "You need an estate plan, here's an attorney, let me know if you have questions," or the all too common approach with a number of other professionals: "You give me one, I'll give you one." Wealth management and collaborative planning would yield for us the results we were all looking for: deep, trusting relationships with clients and other specialists, encouraging them to refer their best clients to us on an ongoing basis.
Just two years later, as I sat through our yearly firm meeting once again, I began to wrestle with the idea that collaborative planning might not be enough. Our team was discovering that being a collaborative firm might not produce the results we desired.
I'm sure you all have an annual process you go through with your team to assess your financials and discuss new projects. Our firm furthers these internal assessments through an often uncomfortable process of introspection where we also assess how we are fulfilling our promise to the marketplace and evaluate the results we would expect from doing it. This process includes a review of our yearly client survey, and ongoing discussions with our informal board of advisors.
Throughout this process we ask some pretty tough questions.
- Are we building deep, lifelong client relationships?
- Are we doing more than helping our clients get good documents or diversify their investments?
- Are we receiving more referrals from our clients than we can handle?
- Are the specialists we work with referring their best clients to us?
Our answers to those questions fell short of our expectations. But our biggest question was, what happened?
What About the Relationships?
For most, collaboration is a noble idea: two independent firms making contributions, adding bits and pieces to create something better than they could individually, all to increase the quality of the client's wealth management. As we examined our results, however, we saw the shortcomings of how we were implementing that vision. We were doing better planning, our revenue was increasing, but we were falling short of our long-term vision of building more trusting relationships with our clients and peers.
This was puzzling. Weren't these trusted relationships supposed to be the natural outcomes of collaborative planning? Wasn't a byproduct of more revenue through wealth management also better overall relationships? Was there something we were doing wrong, or something more we could or should be doing? Our board of advisors forced us to take a detailed look at how we were collaborating with other advisors. This eclectic board is made up of a number of business-owner specialists who we work with in different capacities. Our advisory board forced us to look at every step of our process, from both the client experience and that of the specialist. Their buy-in to our vision and common purpose is what forced us to really look through each tangible step of our wealth management services process. What we found was eye opening.
Our plan for collaborating with other advisors was clearly better than what we had done in the past. The multiple client services we now offered were more robust, as we were including more specialists in our planning. But we recognized, through the review of several client cases, that our approach to collaboration was a bit different from what you might expect.
Lack of Integration
We discovered we lacked any real integration of our efforts. Our firm still followed our own procedures, egos, and beliefs, and our collaborative peers did the same. Although not by intention, we found that our desired outcomes often competed. This was what was holding us back from deeper, more meaningful relationships with our collaborative clients. Yes, we achieved better financial results, but clearly short of the ultimate result we were truly striving for—lifelong relationships. We came to realize that we collaborated with other specialists (and our clients, for that matter) as independent components, not as an integrated whole.
We realized that to truly achieve our long-term results, and to fulfill our promise to our clients and the specialists we worked with, we needed to lose our independence. In other words, we needed to become more adaptive to those we worked with and how we worked with them. An example of what this process of integration looks like today is seen through a review of our newly integrated estate planning process. We made three major changes that took us past collaboration and allowed us to unite our firm with the client and the attorney.
In the past, our role in estate planning consisted of two parts. First we served as the educator, discussing probate and the benefits of a will and trust. Second, we pursued the estate plan like a task, quarterbacking the processes, as if it was something to check off the list. We discovered that our clients were looking for more—a deeper connection, almost like a surrogate family member who would go through the experience with them.
What Integration Truly Means
Far from the "pointing them to the right door" of old, and even different from the teacher/leader role we most recently played, integration today means experiencing the process with our client. We now go beyond those basic roles and facilitate family meetings with beneficiaries and trustees, role-play life events such as retirement and disability, and explore experiences they have had in the past. We also attend each attorney meeting, sitting on the side of the client to make sure all of their issues are addressed in plain language and are resolved. Having this "skin in the game" and not merely acting as an uninterested third party has allowed us to see the whole thing unfold from the client's side of the table. By experiencing the client's emotions, meeting the family members, and listening to other specialists through the ears of our clients, we have begun experiencing deeper relationships. Consequently, it has compelled us to see a second change occur.
A New Line of Communication
We found the experience through our first set of changes profound. Different from the previous idea of wealth management services that got checked off the list as complete, we were amazed with the new commitment we had in making sure this document not merely would get done, but get done in the way that is best for this specific client. Our new desire to search for the best solutions for this client (and every client) prompted us to go back to our advisory board to ask how we could absolutely make sure the client's goals were accomplished. We challenged ourselves further by going out on the limb to ask how we could help make the specialists we work with more effective in achieving the best document and experience possible.
We learned from those discussions that to achieve that end, we needed to be a sort of "assistant" to the attorney. This began a new level of communication that had been non-existent before. In the past, we allowed the attorney to do his or thing as we focused on other services or tasks—more a passing of the baton than true integration. Our need to develop a more seamless process put an emphasis on going beyond pointing out the critical planning issues. Today, we copy the attorney on our meeting notes, and provide estate tax analysis or even IRA beneficiary strategies. We also attempt to understand their processes better, who their team members are, and what we can add. We might contact their team to introduce ourselves or make a connection between our support personnel and theirs. We also strive to provide accurate asset lists, support their retitling of assets, and confirm beneficiaries.
We find that this type of integration actually reduces the time to take a client through the whole estate planning process. Plus, the new dialogues and few extra phone calls and e-mails provide a deeper confidence in all parties (especially the client) of what we have created.
Finally, our new approach includes one more critical piece: the need for relevant and meaningful follow-through. We no longer assume the attorney will be in touch with the client regarding recent law changes or a friendly contact to see how things are going. Nor do we leave it to chance that something slips through the cracks in our own client processes. This step has grown into incorporating annual reviews and updates in our annual service agreements. This provides our own accountability system to make sure the result we were striving for in the beginning will occur in the end and allows us to bring all parties together periodically to review and refresh everything that the plan has achieved for the client. All of this adds to a growing relationship for all.
In the end, I really don't think our firm is unique. Whether your specialty is estate planning, investment management, or risk protection, every advisor I know cares deeply about their client relationships and the others they work with. My hope is that our experience can somehow lift an advisor or firm beyond short-term results to fulfillment of their long-term vision. There is a lot of discomfort in going beyond creating good documents or providing wealth management services. But the type of lifelong impact we can have through abandoning our independent ways and integrating ourselves with other specialists can create opportunities that are often scarce, but well worth the effort.
Philip J. Statz, RFC, is president of Insight Financial Group Inc., which manages the wealth for 50 families and small-business owners providing them peace of mind, freedom of their time, and the ability to experience greater relationships.