Introducing the Next-Gen Wealth Advisor

Using technology and independence to drive greater client impact

Over the past year, our team has talked with over a thousand financial advisors on calls and at conferences. What did we learn? There’s a cohort of passionate, next-gen advisors out there who think like we do. These determined, forward-thinking, and opinionated investors do not accept the status-quo. Instead, they’re committed to deepening the client experience, quantifying their impact, and enhancing investment outcomes using the best methods and technology available. While they don’t have all the answers (who does?), these advisors ask hard questions, read voraciously, and are highly efficient with their time. Best of all, they’re creating meaningful change for their clients and communities. 

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It’s been a privilege to get to know so many of these incredible fiduciary professionals. This is a time of rising debts, stagnant wages, and market uncertainties, where investment choices are highly complex and technology constantly disrupts. In this moment, we need these advisors–Next-Gen Wealth Advisors–to guide us towards a future of less worry and more financial freedom.

Challenges of a modern financial advisory

As these advisors fight to grow their business, we have witnessed many common battles being fought across the United States by independent advisors large and small and tend to fall into one of these two categories: Practice Management or Research

Practice Management Challenges

  • Combatting hit-and-run advice
    • How do you transition from a one-time financial plan to an ongoing relationship without losing a client to a ‘robo’ or self managing (becoming a ‘DIY-er’)
  • Greater Competition
    • Competition for clients is no longer local.  How do you stand out from the pack?
  • Margin Compression
    • Lower management fees and higher regulatory and technology costs
  • Intergenerational Wealth Shifts
    • How to engaging younger generations to preserve the value of your practice

Research Challenges

Do to limited time and rising financial market complexity, these advisors are fighting to navigate changing market conditions and conduct proper fund analysis

  • Quantifying value over ‘Robos’ and ‘DIY-ers
    • Where to apply active decisions in a world of growing model portfolios? How do you quantify the value of your discretionary decisions and more holistic outcomes?
  • Navigating the greater investment choice
    • Fees and transaction costs have come down, while the number of funds and model portfolios continues to rise.
  • Rising demand for customized planning
    • Clients demand bespoke financial plans to achieve highly specific goals
  • Complex Markets
    • Rising wealth inequality, political risks, regulatory uncertainty and new global macro shocks, etc..

Pillars of a Next-Gen Wealth Advisory

The next generation of fiduciaries are driven and principled

  • Independence
    • Have the freedom and flexibility to make a difference in people’s lives by helping them accomplish their goals
  • Impact
    • Strive to create a unique client experience to achieve a transformative (and measurable) impact
  • Efficiency
    • Consistently and thoughtfully integrate technology to drive greater client outcomes and better growth strategies
  • Innovation
    • Thrive in a process of continuous education to better anticipate changing market conditions, innovative products and disruptive technologies

Pillar #1: Independence

Advisors have the independence to determine their own team configuration, client service model, custom investment models, and client growth model

Team configuration

Client Growth Model

Pillar #2: Impact

Advisors achieve measurable change that is wide-ranging, long-lived, specific and measurable.

Pillar #3: Efficiency

  • Time: Is your team using their time and managing tasks efficiently
  • Technology: How does technology accelerate, enhance and make the business more robust?

Pillar #4: Innovation

Continuous Improvement

  • Improvement:
    • Global Market Conditions
    • Product Knowledge
    • Practice Management: Planning, Best-Practices, Legal & Compliance
    • Tools / Technology
  • Information Sources:
    • Professional Networks: COIs
    • Social Media / Blogs / News /  Podcasts
    • Reading: 3rd Party Research & Expert Publications
    • Professional Organizations

Technology stack of a modern wealth advisor

In this modern FinTech wave, there is a blinding array of technology choices available to the advisor. There are some great resources available to advisors to help them prioritize the choices available to them. The Michael Kitces FinTech Map is updated monthly and is an excellent example.

As of December 2019, we were honored to be included in this list in the Investment Data / Analytics section

Moving from Taxonomy to Workflows

It is natural for advisors to think of their technology options in an a la carte manner where they select one or two options from each category. We find that is it useful to organize the technology options based on the workflows of the advisor and of the client buying journey. This helps remind the advisor how they are using the tool and what return on their investment they are getting for each step in the journey.

Aligning technology to workflows to quantify sources of growth

The client journey for a financial advisor

Example technologies for each stage of the client journey

Below are examples only and is not an endorsement for or against any of these services

We’d love to hear about how you organize your technology and what are your priorities as a Next-Gen Wealth Advisor.

Sean Kruzel

Based in Boston, Sean is a portfolio manager, MIT grad, and founder of Portformer. When he’s not investing or programming, he’s probably sharpening his skis for the next icy, New England snowstorm. Check out his full bio here:


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