No matter how wealth management firms refer to comprehensive, or goals-based, planning, advisors and their clients are putting this approach to use and getting results.
The concept is nothing new. But industry executives tell On Wall Street contributing writer Paul Hechinger in this month’s cover story that this year’s market volatility proved the worth of goals-based planning. Hechinger writes that the number of advisors using new goals-planning technology at Wells Fargo jumped significantly during the market turmoil leading into September.
"September [volatility] was a real-life stress test to the client’s plan," Zar Toolan, Wells' director of advice quality, tells Hechinger.
"Clients got worried and they wanted to know, 'What does this mean for my plan and what does it mean for my goals?'" Toolan adds.
Hechinger heard similar accounts from other firms, but at Northern Trust, where a goals-driven approach prepped clients for market fluctuations, no one panicked. Katie Nixon, the firm's chief investment officer for wealth management, says advisors there use technology to build risk frameworks that take into account client goals, which helps keep clients calm and in control.
Riley Etheridge, Merrill Lynch’s head of client segments and advisor development, says that a goals-based approach helps clients make better decisions. That may explain why advisors are increasingly embracing this strategy, a rarity among firms just a few years ago.
One might say the industry is coming full circle. Hechinger writes that many advisors and their firms consider this approach to be good, old-fashioned financial planning. Given recent volatility, clients may need it.
- Planning Clients' Goals In the Face of Volatility
- When Goals-Setting Gets Personal
- Keep Your Eyes on Client Goals