The independent mindset: Next-gen client experiences

Hello, everyone, I'm Chris Reedy. I'm a managing director with Schwab Advisor Services. Today, I'm joined by Jack Straub. Who's a founder and principal with AdvicePeriod. Today, we're going to talk about creating modern client experiences that exceed expectations. Jack, thanks for joining us today.

Thanks, Chris. I look forward to our conversation.

So, Jack, today, it's not just enough to meet or beat a benchmark or an index for clients or family. Those clients have more choice than they ever did before. At AdvicePeriod, when you're thinking about defining those needs for the client and the family, what's unique? How do you approach that at AdvicePeriod?

So a lot of firms like AdvicePeriod, take a planning-first approach to working with clients, and from that emanates an investment solution, but also a retirement solution, estate planning solution, tax solution. And a lot of top firms are taking advantage of this opportunity to begin offering additional services to clients. They're expanding their service offering into legal and tax, bill pay, financial statements because it's an opportunity to really simplify a client's financial life. 

And we believe the more these services that we can digitally integrate, the happier our clients are going to be.

You know, oftentimes advisors are measuring the success of their firm by AUM, or number of clients, or revenue. You have a different definition, family served. Tell us a little more about what family served means and how does that fit into the culture of your firm?

So that's a metric, family served, that ties back to our mission of reinventing wealth management. That's our purpose-driven mission. So for us metrics like AUM or revenue, which are more standard in the industry, don't really tie back to us achieving that broader mission. 

Now, it isn't that financial stability to the firm isn't important, or we don't appreciate industry recognitions or accolades, but we're going to measure our impact and our progress toward reinventing wealth management based on the number of lives of which we're able to impact.

So the modern high net worth client is really expecting… one of the things we're seeing in studies is they're expecting customized guidance. 

When you think about customized guidance, how are you approaching that challenge, and do you think you have a different perspective than others in the industry?

We think the greatest opportunity we have to better service our clients is through technology. So from an internal perspective, can we more efficiently deliver our services through an automated back office, a cloud-based tech stack, which allows us to more profitably run our business, and then reinvest in people, which, ultimately, is why clients hire us. 

And then from a client perspective, can we use technology to change the experience and make it more innovative—paperless signup, mobile access, transparency. 

Ultimately, we believe that a digitally-integrated financial service firm is what clients seek. So over the next year, we're offering tax services, we're going to expand a legal service capability with our clients, all with the purpose of simplifying their financial lives. And we think we can do that very well for ultra-high net worth and high net worth clients through this digitally-integrated position. So by doing that it's going to put us in a position to help more clients, and, ultimately, impact more lives.

Jack, what we've been seeing in the last few years is some cost compression. There's an expectation from clients of transparency on fees. How do you approach fees and this issue at AdvicePeriod, how do you think about fees?

So the way we see it is that clients should pay commodity prices for commodity services, and then it's appropriate to pay a premium price if you're actually getting a premium service. 

One of the challenges that we're seeing is not necessarily fee compression within the industry, rather, it's appropriate recognition of what those value-added services are. So our expectation in the future is that the industry is going to pivot away from an AUM-based fee and the fee model looks… I think it looks more like a flat or fixed fee determined based upon a couple different factors: the scope of services that are being provided to the client, the level of complexity that's driven by the client situation, and the value that advisors being able to add. So we think this approach makes more sense because it's more transparent, it's more equitable, and, ultimately, it will be in the client's best interest.

When you look at AdvicePeriod, and you think about the fact that you're in 15, 16 states now, growth you've had, how do you scale that passion, that culture, the ethos?

This is the number one challenge that we face and I think any service business faces is people are our greatest asset, our top resource, and culture really drives a lot of that. So at the top, culture has to be a fit when we're hiring someone. So the way that we've had success attracting people who believe the same values that we do is really trying to tell the world what it is that we believe, and not trying to convince anyone that our approach, our values are right, but it gives them an opportunity to opt-in if our message and values resonate with them, so it's their choice. And, surprisingly, over the past several years, we've had a lot of success in this, and telling people who we are and what we believe, and it's attracting the right type of clients, teammates, and advisors. 

We have people with different backgrounds, coming with different levels of experience, and we believe building out a diverse team will be strong. And that's, ultimately, what we're trying to do here at AdvicePeriod.

Jack. Thanks for taking the time today to speak with us about exceeding client expectations and what you're doing at AdvicePeriod. We really appreciate you taking the time with us today.