Boosting AUM by 12% with Goals-Based Planning Intake

Boosting AUM by 12% with Goals-Based Planning Intake

Executive Summary

Summit Wealth Advisors, a leading RIA firm, faced challenges in comprehensively understanding their clients' financial goals and aspirations, leading to suboptimal investment allocation and missed opportunities for AUM growth. Golden Door Asset partnered with Summit to implement a goals-based planning intake process, leveraging interactive questionnaires and advanced financial planning software. The result was a significant improvement in client engagement, more personalized investment strategies, and a remarkable 12% increase in Assets Under Management (AUM) within the first year.

The Challenge

Summit Wealth Advisors, despite its strong reputation and experienced team, recognized limitations in its existing client onboarding process. The traditional intake focused heavily on risk tolerance questionnaires and historical financial data, often overlooking the deeper, more personal goals driving clients' investment decisions. This resulted in several critical challenges:

• Missed Investment Opportunities: Lacking a clear understanding of clients' long-term aspirations meant Summit occasionally failed to identify opportunities that aligned with those goals. For example, a client nearing retirement age might have been more interested in income-generating real estate investments to supplement their pension, a preference not captured in standard risk-tolerance profiles. This could lead to clients seeking alternative investment avenues outside of Summit's management, impacting potential AUM.

• Suboptimal Asset Allocation: Without a clear articulation of goals, investment portfolios were often allocated based on generic risk profiles rather than personalized needs. A client aiming to fund a child's $300,000 college education in 10 years required a different investment strategy than a client primarily focused on preserving capital for retirement 20 years away, even if both shared a similar risk tolerance score. The lack of granular goal information led to underperformance in certain areas and dissatisfied clients.

• Client Disengagement and Attrition: The impersonal nature of the initial intake process left some clients feeling unheard and misunderstood. A survey revealed that 25% of new clients felt their personal financial goals weren't adequately considered during the initial onboarding. This contributed to a slightly higher attrition rate in the first two years, costing Summit approximately $5 million in lost AUM annually.

• Inefficient Advisor Time: Advisors spent excessive time clarifying client goals in follow-up meetings, taking away from valuable time spent on portfolio management and relationship building. It was estimated that advisors spent an average of 5 extra hours per new client, spread over 3-4 follow-up meetings, to fully grasp their goals. This inefficiency directly impacted advisor productivity and limited the number of new clients they could effectively onboard.

• Difficulty Justifying Fees: Some clients questioned the value proposition of Summit's services when they perceived their portfolios weren't directly aligned with their stated life goals. They felt like their advisor was merely managing money rather than helping them achieve their dreams. The lack of a clear, documented connection between investments and life goals made it challenging for Summit to justify its advisory fees to some clients.

The Approach

To address these challenges, Golden Door Asset collaborated with Summit Wealth Advisors to implement a comprehensive, goals-based planning intake process. This involved a multi-faceted approach:

1. Goals-Based Questionnaire Development: We designed a series of interactive online questionnaires using Typeform. These questionnaires went beyond traditional risk assessment and focused on uncovering clients' specific financial goals, timelines, and values. Questions were structured to elicit detailed responses regarding retirement aspirations, education funding, legacy planning, philanthropic interests, and lifestyle goals. For instance, instead of simply asking about "retirement goals," we asked clients to specify their desired retirement income, preferred retirement location, and planned activities during retirement.

2. Integration with Financial Planning Software: We integrated the Typeform data seamlessly into eMoney Advisor, Summit's existing financial planning software. This allowed advisors to automatically populate financial plans with client-defined goals and create projections based on those specific aspirations.

3. Advisor Training and Coaching: Golden Door Asset provided extensive training to Summit's advisors on how to effectively utilize the new intake process and interpret the data gathered from the questionnaires. We emphasized the importance of actively listening to clients, understanding their motivations, and using the goals-based planning tools to create personalized investment strategies. Advisors were coached on how to frame conversations around clients' life goals, rather than just focusing on investment returns.

4. Personalized Financial Plan Creation: Advisors used the integrated data to create highly personalized financial plans that directly addressed clients' articulated goals. These plans included specific investment recommendations, timelines, and progress tracking mechanisms, all tailored to the individual client's unique circumstances.

5. Regular Goal Review and Adjustment: The goals-based planning process was not a one-time event. We implemented a system for regular goal reviews and adjustments. Advisors scheduled annual meetings with clients to discuss their progress toward their goals, update their plans as needed, and ensure their investments remained aligned with their evolving needs and aspirations.

The strategic thinking behind this approach was to shift the focus from simply managing money to helping clients achieve their life goals. By understanding clients' aspirations on a deeper level, Summit could create more personalized investment strategies, improve client engagement, and ultimately increase AUM.

Technical Implementation

The technical implementation involved a seamless integration of various software platforms and data management techniques:

• Typeform for Interactive Questionnaires: We utilized Typeform to create visually appealing and user-friendly online questionnaires. The questions were designed to be engaging and intuitive, encouraging clients to provide detailed and thoughtful responses. Typeform's branching logic allowed us to tailor the questions based on previous answers, creating a personalized experience for each client.

• eMoney Advisor for Financial Planning: eMoney Advisor served as the central hub for financial planning and analysis. We integrated Typeform with eMoney Advisor using its API, allowing client data to be automatically transferred from the questionnaires to the financial planning software.

• CRM Integration: We integrated the entire process with Summit's existing CRM system, ensuring that all client data, including their goals, investment plans, and communication history, was readily accessible to advisors. This integration improved data management and streamlined workflows.

• Data Security and Compliance: We implemented robust security measures to protect client data and ensure compliance with all relevant regulations, including GDPR and SEC guidelines. All data was encrypted both in transit and at rest.

• Goal Prioritization Algorithm: Within eMoney, we developed a custom algorithm to prioritize client goals based on factors such as timeline, importance, and financial feasibility. This algorithm helped advisors focus on the most critical goals and allocate resources accordingly. The algorithm factored in variables such as the present value of future expenses, inflation rates, and expected investment returns to determine the feasibility of each goal.

• Monte Carlo Simulation: eMoney's Monte Carlo simulation capabilities were leveraged to assess the probability of clients achieving their goals under various market conditions. This provided advisors with valuable insights into the potential risks and rewards associated with different investment strategies. For instance, a client aiming to retire in 15 years might have a 70% probability of achieving their goal with their current investment strategy, but that probability could increase to 90% with a slightly more aggressive allocation.

Results & ROI

The implementation of the goals-based planning intake process yielded significant positive results for Summit Wealth Advisors:

• AUM Increase: Within the first year of implementation, Summit experienced a 12% increase in AUM, representing approximately $60 million based on their previous AUM of $500 million. This growth was directly attributed to improved client engagement, more personalized investment strategies, and increased client retention.

• Client Retention: Client attrition decreased by 4%, resulting in a significant reduction in lost AUM. The improved client engagement and personalized service led to higher levels of satisfaction and loyalty.

• Advisor Efficiency: Advisors reported a 30% reduction in the time spent onboarding new clients. The streamlined intake process and automated data transfer allowed them to focus on building relationships and providing expert financial advice. This saved each advisor approximately 2 hours per new client, allowing them to onboard more clients and manage their portfolios more effectively.

• Client Satisfaction: Client satisfaction scores, measured through post-onboarding surveys, increased by 15%. Clients reported feeling more understood, valued, and confident in Summit's ability to help them achieve their financial goals.

• Increased Revenue: The combined effect of increased AUM and improved client retention resulted in a 15% increase in revenue for Summit Wealth Advisors. This demonstrates the significant financial impact of implementing a goals-based planning intake process.

• Increased Client Investment: The average new client investment increased by $50,000. Clients were more willing to invest larger sums when they saw a clear connection between their investments and their life goals.

Key Takeaways

For other Registered Investment Advisors (RIAs) looking to improve their client onboarding and drive AUM growth, the following takeaways from Summit's experience are crucial:

1. Go Beyond Risk Tolerance: Don't rely solely on risk tolerance questionnaires. Invest in tools and processes that uncover clients' deeper financial goals, values, and aspirations.
2. Integrate Technology Seamlessly: Ensure your client intake process is integrated with your financial planning software and CRM system. This will streamline workflows and improve data management.
3. Train Your Advisors: Provide comprehensive training to your advisors on how to effectively utilize goals-based planning tools and communicate with clients about their financial goals.
4. Personalization is Key: Tailor investment strategies and financial plans to each client's unique needs and circumstances. One-size-fits-all approaches are no longer sufficient.
5. Regularly Review and Adjust: Implement a system for regular goal reviews and adjustments to ensure that client plans remain aligned with their evolving needs and aspirations.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors identify hidden client needs and create more personalized, goals-based financial plans. Visit our tools to see how we can help your practice.