As the financial planning industry continues to feel pressure from low-cost digital advice platforms, some advisory firms are embracing the concept of
holistic planning as a means of taking the focus away from pure investment management.
That's the formula being followed at Prio Wealth, a $3 billion Boston-based advisory firm that prior to this month had been known as Seaward Management.
The new name, which CEO John Bratschi said is designed to underscore the firm's new priorities, is part of the rebranding stage of an evolution that started a few years ago.
"The rebranding is the final touch on our holistic planning shift," he said. "This firm has been around for 30 years, and we want to be future ready for the next 30 years."
While a lot of advisory firms have taken the emphasis off the most commoditized part of financial planning by completely
outsourcing the investment management services, Prio is keeping investment management in- house, but evolving the way it provides other services and works with clients.
"We're not shifting away from investment management, we're building upon it," said Mr. Bratschi, who joined the firm 18 years ago and is one of five partners representing the second generation of ownership.
Describing Prio's business structure as a pyramid, he called the investment management work done for clients "the bedrock, and you better do that part right."
The next level is the planning part, where clients' goals are identified and plans are put in place toward achievement of those goals.
The top level is what he called "concrete advice on life and meeting priorities."
But, pyramids and rebranding efforts aside, the biggest change, as described by Mr. Bratschi centers on client communications.
"When we started asking clients how we can do a better job, the overwhelming response was that they wanted more clarity and transparency," he said.
It turns out, the advisers weren't lax in giving information to clients, they just weren't giving clients the kind of information and feedback that they wanted.
The old way was to lean heavily on spreadsheets and investment performance objectives, which felt right because that's the way it had always been done.
The new way begins with softer services like client evaluations, more interaction, and lots of listening.
Prio Wealth instituted a discovery process, which involves gathering client feedback through a series of "value statements." For couples, Mr. Bratschi said the evaluations often uncovered diverging priorities, goals and concerns between spouses.
"The wife might want to push more money down to the kids, and the husband would be worried about financial security," he said.
"We're spending a lot more time flushing out the priorities and giving them clarity on how to do something like move money down to the kids, if that's what's important to them," Mr. Bratschi said. "We're changing the focus from what our view of priorities are, to helping our clients live rich lives as defined by them."
The decision to move the firm
beyond a focus on asset management was driven by multiple factors, including the trend toward
robo advice platforms, he said.
"When I look at what's happening in our industry, I know using the same approach we've used for the last 30 years for the next 30 years won't work," Mr. Bratschi said. "We know that two-thirds of women when asked say they would change advisers when their husband dies, and we know that younger generations would be happy to use a financial planning app developed by Amazon or Apple. So, we see a unique opportunity to use all this technology and be human."
Tipsheet:
• Increase client communications, including the use of online interactions.
• Segment meetings into smaller "bite-size" topics.
• Document and summarize communications with clients so the clients can review them.
