Money Management Institute Report Highlights Shift to Household-Level Wealth Planning and Portfolio Management

A distinct shift in focus from the utilization of discrete products, accounts, and technology tools to holistic, household-level integrated solutions has emerged across the advisory industry.

Research published today by the Money Management Institute (MMI) highlights a new trajectory for the future of financial advice marked by human guidance enhanced by digital capabilities.

The report, titled “Modern Wealth: The Roadmap to Improved Investor and Advisor Outcomes,” finds that optimized, household-level wealth management has moved from the realm of “The Next Big Thing” in advice to the new standard. This shift brings new complexities and opportunities for financial services firms in coordinating client data, digital tools, and processes to enable financial advisors to provide comprehensive guidance for the benefit of investors.

The research also highlights the importance of connecting multiple technologies and data sources as an integral part of this change, as advisors and enterprises move from a siloed technology and product approach to more coordinated technology and investment platforms to quantify the benefit of household-level management and help investors achieve their financial goals.

Key findings from the research include:

  • Today’s investors tend to own five to six accounts with a range of registrations and product types, most commonly managed by two or three advisors. In their quest to diversify products and advice sources, investors are unable to plan appropriately, optimize their full household portfolio, and achieve their intended results.
  • Industry-leading firms are creating comprehensive wealth platforms that leverage and coordinate in-depth financial planning and goal-setting, multi-source data feeds, and various technology and software capabilities.
  • Optimal asset location and the organization of multiple account registrations using a risk-smart, tax-smart strategy can add as much as 183 basis points per year in incremental after-tax returns and income.
  • There are a number of key software tools necessary to coordinate household-level management, including: CRM and client portals; financial planning; account data aggregation; risk management/asset allocation; portfolio construction/investment proposal; account onboarding and funding; tax-smart asset location; household-level management and rebalancing; optimal income sourcing; trading platforms; household-level reporting; and insurance/protection.
  • Consumer demand has shifted from a simple “beat the market” mentality to a personalized, goals-based, holistic solution. As a result, industry leaders are moving away from a focus on beating arbitrary benchmarks for each product and account, and toward achieving client goals across household holdings.
  • 80% of consumers are more likely to do business with a firm that offers a personalized experience; 90% indicate they find personalization appealing.
  • 65% of high-net worth individuals are prepared to leave their wealth management firm due to the lack of an integrated, omni-channel experience.
  • The human advisor remains a critical piece of the puzzle. While digital investment advice platforms such as robo-advisors rose to prominence by promising an improved digital experience, adoption has remained decidedly low. An overwhelming majority of investors still prefer some degree of human interaction to make investment decisions and life choices in the face of increasing complexity.

The report notes an evolution in the expectations of investors and consumers for automated, all-in-one systems and recommendation engines, as other aspects of their daily life—from shopping to entertainment—offer personalized experiences tailored to individual needs. Moreover, the research notes, today’s wealth clients are better informed than ever before, with instant access to the tools and insights that were previously only available to advisors and industry insiders. As a result, they have come to expect not just more value from their advisor interactions, but full transparency along the way.

“With the increased complexity of investor households, it is imperative to coordinate planning and management at the household level in order to drive improved outcomes,” said Craig Pfeiffer, president and CEO of the Money Management Institute. “Today’s wealth management industry is taking advantage of important advances in technology to connect the component pieces of wealth planning and portfolio management and deliver the highly integrated, customized experience and improved outcomes investors now demand.”

“Many leading firms will be introducing comprehensive household-level platforms in 2019. These advances help investors improve after-tax returns and income. We’ve already entered this new era – now the battle will be fought over who has the best system.”


– Jack Sharry, co-chair of MMI’s Digitally-Enhanced Advice Committee and executive vice president and chief marketing officer at LifeYield, LLC

Eric Lordi, managing director of Morgan Stanley, notes, “We have spent the last three years building WealthDesk, a comprehensive household platform for advisors to help investors manage risk and taxes across their household portfolio to improve clients’ financial outcomes. By doing this, we believe we will increase the trust of clients and earn the opportunity to manage their full households.”

Gary Carrai, senior vice president of LPL Financial, added, “We are building integrated and coordinated technology systems to enable advisors to convert data into insights, so they can convert those insights into wisdom to provide highly personalized guidance. This approach helps investors work toward better outcomes and helps advisors expand their capacity to serve clients while creating a competitive advantage for their practice.”

Elaborating on these points, Charles Smith, executive director of EY, said, “The firms that will win the war for advisory dollars – both qualified and non-qualified – will be the ones that clearly articulate the value of advice through a goals-based approach, a simplified plan to tie goals to a personalized set of portfolios, and effective management of the impact of taxes and fees on the client during the onboarding process.”

About the Money Management Institute (MMI)

Established in 1997, the Money Management Institute (MMI) is the industry association representing financial services firms that provide financial advice and investment advisory solutions to investors. Through conferences, educational resources, and thought leadership, MMI facilitates peer-to-peer connections, fosters industry knowledge and professionalism, and supports the development of the next generation of industry leadership. MMI member firms are dedicated to helping individual and institutional investors, at every level of assets, plan for and fulfill their financial goals.

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