A new report from Aite Group, LLC examines how financial planning relationships are created and evolve. The report analyzes the complexity of financial plans by wealth segments, the level of online access available to consumers, and the type of reporting financial planning clients obtain and desire. It also provides an analysis of consumers’ annual spending on financial planning services, and shows the level of satisfaction with the planning service they currently receive.
The report – based on an October 2007 survey of 505 U.S. residents five years before or five years after retirement on their usage of and general exposure to financial planning – reveals that financial planning enables financial services firms to build strong and potentially lucrative relationships with their clients. The needs and desires of clients across wealth segments, however, vary greatly. This is particularly true for the lower wealth segments for which financial planning may be a necessity to improve retirement readiness, and where costs may lead to the avoidance of financial planning services. Today, a new breed of self-directed online financial planning solutions is being developed that could provide a more ideal solution for the lower wealth brackets. Financial services firms which effectively address the planning needs of these consumers will have a much better chance of capturing a larger share of their rollover retirement assets.
“Financial planning encompasses a lot of the aspects that constitute the ideal wealth management proposition,” says Alois Pirker, senior analyst with Aite Group and author of this report. “It promotes and delivers a service on a holistic level, integrates the client’s goals, is product-neutral and provides a basis for deepening the advisor/client relationship and for ultimately growing the wallet share of the firm with its clients. Clearly, financial planning has a great opportunity to take center stage in the wealth management game, but can only succeed if it’s well-tailored to its target audience.”