Why Simplicity is the Key to Weathering the Wealth Management Storm


Last Updated on July 6, 2021 by Connor Prendergast

Our last piece  [LINK], talked about the storm of disruption wealth management is weathering — and how it has added complexity across the board. The unfortunate thing is that advisors have been unnecessarily also adding complexity to communications, operations, and client service. That’s the bad news. The good news is that it can be undone. 

Yes, automated advisors and fintechs are upending traditional models, but that doesn’t mean advisors need to add complexity just to get ahead. In fact, in a landscape where competition is fierce, simplicity is often the best strategy. The focus should instead be on refining the elements of the wealth management business to their simplest components. 

Simplicity can be the differentiator and competitive advantage advisors need in a crowded marketplace. So how do we go about the business of simplifying? It’s about getting back to basics and focusing on simplicity in products, accounts, communications, and operations.

Solving Communications Complexity

Advice and interpretation are core components of wealth management. An advisor’s job is to digest the complexities of building wealth and communicate it in simple, easy-to-understand terms for clients. At its most basic level, simplifying communications means getting clear. 

The first area of focus for clarity is in reporting. Custodians tend to focus on covering their bases and ensuring that they’re providing the necessary — and legally required — information to customers. What that looks like to the customer is a lot of hard-to-read fine print and a bunch of difficult to interpret data. 

Your clients are not interested in the fine print. They’re interested in how their money is doing today. Adding clarity in reporting means being a “big print” advisor and favoring first-glance formatting for information that goes in front of your clients. This information should encapsulate the big picture and be easy to read and easy to digest. Really buttoned-up advisors will offer this information in a branded, clean, simple, formatted report that is both easy to create and deliver. 

Another way to be clear with your clients is to stay in touch. High-frequency and automated touchpoints to build trust while opening the door to helpful conversations. Proactive outreach, for example, when clients fall outside of their target allocation and what you’ve done to rebalance is a simple way to let clients know that you’re paying attention and adding value. In short, it’s a simple way to demonstrate value without adding complexity.

This method of communication also has the benefit of being simple and comprehensive at the same time. High-frequency yet simple communications allow you to cover a variety of topics over time and deliver more value than a “big bang” report once per quarter. This also keeps you and your clients geared toward simple, focused objectives. You don’t need to answer every possible question in advance. You just need to get more comfortable delivering less data and more clear, helpful information and interpretation. 

Solving Business Model Complexity

Another area where advisors love to create complexity (even if they don’t realize they’re doing it) is by complicating the services they offer and the service models used to serve clients. Many advisors create bespoke services and pricing models for each and every client, so it’s easy to see how quickly service models can grow complex and burdensome. Instead, advisors should only customize services where it adds value (read: stop creating one-off service models for every single client). 

Creating complexity in products and services is only part of the problem. Advisors also miss opportunities to proactively simplify via automation. Automating reporting so that clients get the most pertinent information when they want it is a step in the right direction. Not only does it cut down on time spent creating and sending out reports, but it keeps your clients happy, too. Similarly, automation can be used to present clients with “always-on” access. Leveraging a client portal that securely houses all of your clients’ “need-to-know” information enables you to always be there for your clients without the heavy lifting of doing everything manually. 

You can’t control the direction of the industry, the winds of competition, or the whims of your clients. You can control the level of complexity you inject into your wealth management practice. Using the simple, straightforward tips above should help add clarity and ease for your practice — and your clients. 

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  • Ashley Poynter

    Ashley specializes in content marketing for complex industries. She is passionate about helping fintechs tell their best stories.

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Ashley specializes in content marketing for complex industries. She is passionate about helping fintechs tell their best stories.
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