Financial Planning: When You Should Offer White Glove Level Services

It’s a financial advisor’s job to look after their clients’ finances, including creating a financial plan based on their overall financial goals and specific investments. While most advisory firms offer some form of a financial plan, not every firm offers a comprehensive, white glove plan as a premium-level service offering. Financial planning is not a one-size-fits-all approach, so it’s important to understand when a white glove approach to a financial plan is necessary for your clients and the basics of what you should be offering.

When Should You Provide White Glove Financial Planning Services?

When you should offer a comprehensive financial plan depends greatly on your client segmentation and your specific advisory goals. An advisory firm’s service model will determine which clients need a more individualized plan for their investments.

Creating a premium financial plan can be an extremely time-consuming and costly process, so it’s important to clearly identify when clients need it and when they don’t. Clients with fewer assets may not need the same individual attention that clients with high-value assets or high-net-worth accounts would require. More often than not, advisors who act as fiduciaries will focus on creating comprehensive financial plans for their clients, as they are able to put client needs first.

During times of market volatility or downturn, extra attention and care in wealth management can be especially important. The individual attention given to clients through a premium financial plan can push your advisory firm above and beyond your clients’ expectations, leading to a positive client experience and the potential for referrals, testimonials, and better lead generation.

Many advisory firms see growth through word-of-mouth promotion from their own clients. By taking the time to have a short call with your clients during times of uncertainty in the market, you can build a positive relationship between you and your clients and create an opportunity for delivering top-end financial planning services.

The Six Basics of Financial Planning

Now that we’ve discussed the importance of offering a premium financial plan, let’s talk about what that might include. While every advisor should offer some form of financial plan service, not all are as in-depth as everything “done-for-you” financial planning.

 There are six basic aspects that a complete financial plan should offer:

1. Cashflow and debt management  This integral part of financial planning is arguably the most important part. While some clients may need help budgeting or mortgages, others may need your guidance in Securities-Backed Lines of Credit (SBLOC. 
2. Emergency funds and insurance coverage  With daily living expenses in check and a focus on investments, clients may forget to set aside liquid emergency funds for unexpected expenses or income loss. Many clients also request assistance with determining an appropriate level of insurance coverage for the proverbial rainy day — whether health, disability, auto home, or life insurance.  
3. Investment management  Key to any successful financial plan is an investment plan to help support client goals whether sending children to college or retiring comfortably. Commonly outsourced, investment management includes building portfolios and ongoing due diligence. While basic financial planning may outline investment types and dollars, clients may expect complete investment management services.
4. Retirement planning  Among the most frequently asked questions by clients regarding retirement planning are "When can I retire?" followed by "How much money do I need to retire?" Going deeper into the retirement talks, the plan should identify exactly how much clients can spend during their retirement to maintain their desired lifestyle without endangering their retirement income. This spending plan should account for possible increases in spending and factor in any potential future inflation, as well as identify whether or not funds will be pulled from a tax-qualified or non-tax-qualified account.
5. Tax and charity/philanthropy planning Many clients turn to their financial advisors with questions about minimizing their taxes or tax-deductible donations. Thorough financial plans will take into account these aspects of a client's finances and interests.
6. Estate or legacy planning Focused on future generations, estate planning can include preparing a will, setting aside funds for estate tax, or planning property transfer. High-net-worth and ultra-high-net-worth clients may have more complex needs and require more time for you to plan.

Creating premium financial plans requires a deep understanding of clients’ personal and financial wants and objectives. Be prepared to discuss your clients' short- and long-term goals, fears, and interests. You can get the conversation started with overarching questions, such as “What do you want to accomplish in five years, ten years, or twenty years?” or "Do you want your values to be reflected in your investments?" Asking prodding questions can provide a lot of clarity and a path forward.  

Depending on how in-depth you are with your clients’ financial picture, a white glove financial planning service can take up to 30-40 hours to complete. This level of individual planning takes a lot of time and effort from an advisory team. Let's take a look at what it costs to offer white glove financial services.

What White Glove Financial Planning Can Cost You

There are two major costs that a firm can face when creating a premium financial plan: the software and the service itself.

The software is self-explanatory. Your firm should be equipped with the right analytical tools that can accurately map and forecast the future of your clients’ finances. These tools can range anywhere from a few hundred dollars to up to $7,000 a year, so it’s important that you determine what your firm needs before you go shopping. If you buy planning software with features you don't need, you’re potentially wasting money. 

The human capital required is the second half of the cost you will face. After all, a person will need to put these financial plans on paper for your clients. Whoever creates this plan will need to devote a significant amount of time to the clients. If you are an RIA or a smaller firm, taking such a large amount of your time to work individually with one client might hurt your ability to perform other duties within your firm and services for other clients.

How to Handle Costs for Premium Planning

Typically, large firms, such as broker-dealers, can absorb this cost. Smaller firms, such as RIAs, often need to make up for these costs in creative ways.

One way to do this is by charging a consultation rate per hour and an additional fee for any add-on features that may be added to standard data entry. Consultation services and integrated wealth tech platforms from companies like AssetMark can help firms determine what software advisors should use, as well as what rates to charge depending on what services they are providing.

If you don't have the time or resources to offer white glove services on your own, outsourcing this work to a team of experienced consultants, or an experienced financial advisor — instead of hiring one on your team — can prove to be a more cost-effective solution.

Consult with AssetMark for Expertise and Support

When clients turn to financial professionals or financial planners, they want confidence that their goals will be met.

AssetMark has the experience and expertise to support advisors in building their white glove financial services in many ways. From recommending software to walking through examples of how to approach certain client segments, our experienced team of consultants and robust resources can help advisors offer premium solutions to their clients. Request a consultation today to get started.