The evolving client relationship – from money manager to life manager

While the bond between every advisor and client is unique, the industry is in near full agreement that the nature of those relationships is changing. In short, conversations are getting deeper, and the advisor’s role is getting broader.

According to the majority of advisors surveyed, client expectations, what advisors learn about their clients and the very nature of advising those clients have all changed significantly during their careers. (See charts below.) Notably, this is not just the perspective of seasoned advisors who have had more time to develop relationships. Even the majority of advisors with less than 10 years of experience have undergone a great deal of change in their practices, suggesting that the evolution of advice is ongoing.

Term life series chart

The pie chart below paints a picture of how advisor-client relationships are changing. In short, more and more conversations stray from financial and investment topics toward other aspects of clients’ lives. Notably, both newer and longer-tenured advisors noted they were having a lot of conversations beyond finance, implying that having broader conversations aren’t simply a byproduct of knowing a client longer, but an expectation that advisors should get to know their clients better.

While the chart shows advisors are having many nonfinancial conversations, the rate of those other conversations is not standard. For 42% of advisors, only a quarter or less of conversations cover these broader issues. But more than a fifth of advisors said nonfinancial topics dominate at least half of their client conversations. The wide variation suggests that increased dialogue about broader life issues could be a competitive differentiator for advisors.

Term life series chart

Our research also reveals that although advisors acknowledge clients desire more holistic life planning, many professionals struggle to get their head around all these issues. As the charts below show, 88% of advisors said they believe a broader view of their clients that transcends traditional financial measures is “extremely” or “very” beneficial; yet only 58% said they are “extremely” or “very” knowledgeable about their clients’ nonfinancial goals.

Term life series chart

While the bond between every advisor and client is unique, the industry is in near full agreement that the nature of those relationships is changing.

The wide variation suggests that increased dialogue about broader life issues could be a competitive differentiator for advisors.