In the age of Apple, Netflix, and Spotify, clients want a more flexible approach to the services offered to them, and the subscription-based planning model is the next financial industry evolution. Advisors are seeking ways to adapt their offerings to meet changing client needs, including how, when, where and what type of financial guidance is needed.
Over the past several years, we’ve seen more entertainment lovers cut the cord, opting for subscriptions to enjoy their favorite TV series, movies and music. Many physicians are starting to charge their patients membership fees instead of accepting insurance. The auto industry is leveraging monthly vehicle subscriptions — even products like daily vitamins, clothing and beauty needs are available to consumers via subscription services. Likewise, financial professionals and those seeking financial advice have begun to opt for the subscription-based fee service model.
Financial control
A leading reason clients request a subscription-based service is because they feel they don’t have a grasp on their financial situation, and customized, ongoing advice provides organization, comfort and control.
A subscription-based model allows clients to have access to an advisor when they need one most, gain confidence over their financial futures, and choose their payment plan typically monthly or quarterly. A subscription-based plan also allows a client to work with their advisor during critical life moments when they might need advice from a trusted professional to meet their evolving financial situations and goals.
A customizable program
The level of service provided in a subscription-based plan is completely customized to a client’s unique needs and objectives to ensure value is being delivered. Each client’s financial realities vary in complexity and require different guidance.
Clients can choose from core services such as cash flow and debt planning analysis, compiling a net worth statement, or simply organizing financial documents and getting their “financial house” in order. Advanced services such as charitable planning, wealth transfer planning and business succession planning strategies are also available.
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Depending on the client’s circumstances, these situations could take a few months to several years to completely resolve. Additional services can be added or removed at any time as the client’s needs change. Pricing for these services can also be adjusted accordingly throughout the process. This flexibility creates the opportunity for targeted financial planning and the ability for clients to obtain the right guidance at the right time.
Subscriptions drive engagement
For advisors, the subscription-based model can deepen client relationships and help bring interaction with new populations or prospective clients. Clients who pay for advice are usually more serious about their financial futures, more engaged with dependents prior to wealth transfer and more likely to return for future needs.
Subscription-based financial planning can meet the needs of a wide range of clients and help advisors and firms identify gaps in the client’s financial wellbeing that could potentially keep them from meeting their goals and objectives. Ultimately, the real benefit is in the ongoing advice and relationship building advisors provide to clients.
Meeting consumers where they want us to be
As consumer preference for subscription-based services continues to drive forward, investment advisory firms and advisors should pay attention to this trend. In adapting to this model, we are meeting clients in a place they’re increasingly familiar with, rather than asking them to adapt to us. This allows our advisors to continue to meet an array of client needs in a method outside of the traditional planning format. Clients still receive unbiased financial guidance, but now an evolved format can easily expand or contract depending on the client’s needs.
Our advisors work with clients at every point on the financial spectrum and have found that many benefit from this model. For example:
- HENRYs (High Earners Not Rich Yet), that span generations, have needed assistance with planning debt payoff or better understanding their cash flow. These clients tend to use their high incomes to furnish a comfortable lifestyle and may not put much thought into saving for the future or protection for themselves and their families.
- Divorced clients who are starting over again have appreciated the personalized service to assist with inventorying assets and developing strategies to work towards new life goals.
- High-net-worth clients have also benefited from this platform through in-depth review of tax mitigation strategies, asset protection and overall coordination of their financial affairs.
Tailored ongoing advice is helping to meet clients where they are, providing guidance when it’s needed most. On an ongoing basis, advisors are helping clients meet their financial goals and are building client relationships essential to a successful planning engagement, working to create value for every client. Most importantly, we are evolving our practice to adapt to how clients are increasingly engaging with their coveted lifestyle brands and moving from a commodity to a community partner.
