www.financial-planning.com/asset/article/574271/dont-ne -
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Published on: 4/30/2008
Last Visited: 4/30/2008
"The key thing an advisor needs to know is what segment the client is from psychographically," says Bob Hedges, managing partner at Mercatus.
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It's a win-win for both banks and advisors if it's handled properly, Hedges says.The bank can make money on qualified savings accounts, such as IRAs, in the accumulation phase; meanwhile these accounts work like a seed bed, creating a host of future advisory clients.As these accumulators reach a certain asset level, health and longevity risks and retirement-income planning make their needs complex enough to justify working face-to-face with an advisor.
The banks involved in the Mercatus study,BofA, Sun Trust, Wachovia, Washington Mutual and Wells Fargo,are now tackling the issue of how to cost-effectively serve clients in the accumulation phase in order to turn them into future advisory clients.
The challenge: "The strategic conundrum is taking the high-net-worth solution and applying it to the mass affluent," says Hedges."Advisory services aren't scalable and the mass affluent only really need simple solutions.Banks will win by using technology, such as call centers and the Internet, while keeping their financial advisors focused on high-net-worth clients where the economics work."Most mass-affluent consumers are already comfortable monitoring their accounts online, Hedges adds, because that's where they check the performance of their 401(k)s.
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