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Wirehouses, Indies Market Themselves as Life Planners

March 27, 2015

Life planning used to be an outpost in the financial-advice landscape, practiced mostly by independents with special qualifications — a little training in psychology, say. Now it’s going mainstream. According to The New York Times, the wirehouses and other large firms are increasingly coaching their FAs to speak to clients less about money and more about the meaningful events in their lives.

When Merrill Lynch surveyed investors about what was important to them, “they never said words like beta or alpha,” David Tyrie, the firm’s head of retirement and personal wealth solutions, tells the Times. Similarly, when UBS Wealth Management canvasses clients about their priorities, “the financial stuff is at the bottom,” client development chief Judy Spalthoff is quoted as saying. Both firms are putting significant resources into programs that address the non-financial stuff. At Merrill, it’s Merrill Lynch Clear, a platform for retirement planning that addresses clients’ medical needs, charitable goals and other concerns as well as their income requirements. At UBS, according to the paper, an “advice beyond investing” initiative includes financial-literacy sessions for clients’ kids.

Meanwhile, as FA-IQ has reported, United Capital is rebranding itself as a “financial life manager.” And the firm isn’t just following a cultural hunch, says the Times; it’s basing its new approach on social-science research. A recent survey by Riedel Strategy of investors with assets above $500,000 who had financial dependents showed that “when people talk about their financial lives they talk about working and spending,” Barnaby Riedel tells the newspaper, not saving and investing. Furthermore, when asked about crossroads in their lives, respondents talked about the difficult choices that set them going in one direction or another.

So now, ThinkAdvisor reports, visitors to United Capital’s website see a video (though not on the home page, which is presumably undergoing a redesign) about whether to choose private school for the kids over more vacations, or a second home over an earlier retirement. Joe Duran, the firm’s CEO, tells ThinkAdvisor such decisions — not asset-allocation choices — are what financial life management is about. Interestingly, he has not trademarked that phrase, even though it’s part of his firm’s name, because Duran sees it as a concept that he hopes will spread through the industry. Still, he considers United Capital a front-runner. “We want to be the first billion-dollar brand in financial life management,” ThinkAdvisor quotes him as saying. The firm has AUM of $13 billion — “large enough to make a difference,” Duran tells the website.

By Joan Warner
  • To read the New York Times article cited in this story, click here if you have a paid subscription.
  • To read the ThinkAdvisor article cited in this story, click here.