Advisers are in a better position than doctors to understand client cognitive ability, according to the BlackRock’s adviser engagement head in the US.
Speaking on Thursday morning at the BlackRock Wealth Symposium in Sydney, BlackRock US Wealth Advisory head of advisor engagement Elizabeth Koehler said a key part of the value advisers can provide is addressing the risks of aging.
“I know this is difficult and emotionally charged but the reality is that there is a lot of research out there that shows advisers are actually in a better position than doctors to understand the mental acuity of your client,” Koehler said.
“That means often times you are on the front lines if things start to change with cognitive capacity.”
She outlined this as part of what matters more to clients and the value of thinking outside of their investment portfolio.
“I know that’s not easy, but it’s so important to the family you serve, and it can create such gratitude with those families if you have a plan in place ahead of time to understand their wishes, what they want to do, who you can talk to and just be on the frontlines of cognitive capacity,” Koehler said.
Koehler’s work in the US specialised in different areas on practice management for advisers, whether its best practice, client services, end-client resources or behavioural finance, to list of few examples of her scope.
On the practice management side, Koehler said there are outside-of-the-box ways advisers are finding referral networks or finding other professionals for expertise.
“We talk of experts and partners and immediately people think CPAs and attorneys, which is great and they are critical partners and always will be, but more and more we’re seeing advisers reach out to additional experts,” Koehler said.
“It could be long-term care consultants, home maintenance providers, for the next generation who tend to be even more entrepreneurial they have website designers or business consultants, even interior designers.”
Koehler said this ability to branch out to other professional networks gives advisers the opportunity to be a point person for client needs beyond the financial dimension of advice.
“In my opinion, what I’m observing is that gone are the days that clients expect you to have all of the answers for them, but they do expect you to be one degree of separation from getting the answer,” Koehler said.
“Building out this network of experts can be more and more powerful.”
She pointed to an example of an adviser team she had worked with, which would ask clients what other experts they use in their life.
“Then call those experts and talk about your business model, who you’re trying to serve and your ideal client, and we see a lot more referrals that way from people being more creative from different clients,” Koehler said.
Koehler noted the shift of advisers globally going from being focused on investment portfolios to instead being more engaged with the expanding face to face needs of clients.
“I recognise and I see it each and every day, just how much you all are juggling and how time is at a premium,” Koehler said.
She added some of the conversations her department has with advisers are that clients are looking to advisers to solve more problems.
“Unless you’re outperforming the benchmark by a percent or two – portfolio is still incredibly critical – but increasingly we’re seeing clients needing and wanting more,” Koehler said.
“Some of the ways we’re seeing advisers think about this is strengthening and streamlining their investment portfolios [management],” Koehler said.
“A lot of research out there that shows, on average, advisers spend hundreds of hours in a given year on managing portfolios and all the administration that goes with it.”
As had been in the case in Australia, Koehler said model portfolios and managed accounts have seen significant growth.
“Some do more customisation – using models or managed accounts as a foundation to customer – but the reality is here… no matter what your approach is to portfolios, taking time to think about streamlining and getting time back and efficiencies in your investment process is one way we’re seeing a lot of advisers dedicate more time to these client-facing activities and set themselves apart,” Koehler said.
