November 22, 2022
Ben Franklin once said, "When you're finished changing, you're finished." This quote is particularly relevant when examining the trends we are currently seeing in serving high net worth (HNW) and ultra-high net worth (UHNW) clients.
As a result of external forces like the consumerization of IT, the globalization of wealth, the work-from-home trend, and increasing data complexity, advisors for HNW and UHNW clients are adapting their business practices. Firms that cling to inefficient and manual business processes, like spreadsheets and siloed solutions, will lack the ability to scale their business, will introduce unnecessary risks, and ultimately, under-serve their clients.
Bill Pay Trends for 2022
To prepare your firm for the future, we will examine current trends and survey data to help you set your office up for success.
Rising Client Expectations
Access from Anywhere at Anytime
HNW and UHNW clients are accustomed to using technology in their everyday lives to help them communicate and work from anywhere, get answers to questions quickly, and keep an eye on all aspects of their lives — regardless of where and when they travel.
Today, clients are looking for that same experience from their business managers and family offices. They want their bills paid efficiently and securely. They also want transparency and control, and they expect to have information easily accessible on their device of choice.
This is especially true for young adults who grew up digitally native and have come to expect that banking and financial apps will easily provide information at their fingertips. As Millennials and Generation Z start to accumulate more wealth and influence, the demand for this level of service will continue to rise.
This is why AgilLink provides an intuitive mobile app. The app allows clients to easily approve invoices and review balances and recent transactions. Advisors can use the mobile app to keep things moving while they are out of the office by approving bills and reviewing coding of certain transactions.
Data is the new oil, and having access to up-to-date information from anywhere allows advisors and partners to quickly provide answers, insights and advice to their clients.
41% of the wealth management firms surveyed in the AgilLink 2022 Bill Pay Survey say that they are able to provide better insights and planning because they have access to a rich dataset of their clients’ spending habits. Not only do clients value bill payment service, but advisors are also then able to provide better advice and reporting to their clients because of the service. This is only possible if you are able to leverage the data you collect as part of the bill payment process. If you are using spreadsheets or disparate systems, it will become increasingly difficult to harvest this data.
Quick and Accurate Answers
Wealthy clients also expect your team to provide answers to their questions quickly and accurately. Questions like: What is my net worth? Do I have the necessary cash flow for significant purchases or expenses such as taxes? What am I spending my money on? To deliver, firms need to have financial reporting that is inclusive of both a client’s personal and investment assets and activity.
With AgilLink, you are prepared to answer these questions, because we combine your financial accounts, client banking data, account aggregation, bill pay, and investment data all on one platform — giving you a 360-degree view of all of your clients’ wealth.
Being able to gain additional insights and respond more quickly to your clients creates an incredible stickiness to the relationship. In our survey, 62% of advisors responded that the number one benefit of providing bill payment is this relationship stickiness. It’s like Super Glue for your HNW and UHNW clients.
If rising client expectations weren’t enough, firms also need to meet employee expectations for increased job satisfaction, provide increased work flexibility, and be ready for rising salary costs. It’s unavoidable — to retain the best talent, firms need to change their approach to hiring and retention.
Focusing on Job Satisfaction
Today’s knowledge workers are looking for meaning at work beyond their paycheck. According to a 2020 McKinsey survey, almost two-thirds of US workers said the pandemic has caused them to think about their life’s purpose, and close to half of respondents said it’s even prompted them to reconsider the kind of work they do.
In particular, firms we talk to are finding it increasingly difficult to find bookkeepers. One partner mentioned he couldn’t even find poorly qualified candidates, never mind top talent.
Part of the struggle lies in the fact that the role of the accountant and bookkeeper needs to evolve. Employees are not happy spending their time working on manual, repetitive, and time-consuming tasks. But by automating mundane tasks, like re-keying the same data into multiple systems, you can allocate more of your team’s time to valuable and client-facing activities that boost morale.
In the AgilLink 2022 Bill Pay survey, firms that used QuickBooks for bill pay and client accounting said their biggest pain point was relying heavily on manual processes (57.14%).
By moving to a platform that is purpose-built for serving HNW and UHNW clients, like AgilLink, firms can automate and streamline many of their manual processes with workflows and document imaging so that they can more easily retain and attract staff. AgilLink can also help give staff the flexibility to work from home with its fully web-based and secure platform.
Simply put, firms that are reluctant to automate manual processes out of a fear of losing revenue because they bill on a time and material basis will increasingly find it more difficult to attract and retain talent.
Scale without Increasing Operations Staff
Another benefit of moving to a modern bill pay platform is that you can scale the firm without adding headcount to your operations.
Using AgilLink, Pathstone was able to process in the neighborhood of “55,000 – 60,000 bills for clients last year”, says Matt Fleissig, co-founder and CEO of Pathstone. “By implementing AgilLink, Pathstone now has a singular system where their operations team can access their clients’ financial accounting data, along with document imaging, embedded banking with custom approval rules, and full audit capabilities. You may be imagining a giant bullpen of people signing checks and recording transactions, but that is not the case, because of the partnership that we have together.”
Conclusion - Be Prepared for Change
External forces like the globalization of wealth and the scarcity of knowledge workers have forced considerable change for firms that service wealthy clients, but there is also a lot of opportunity for those who can lead the charge.
Wealth management firms that embrace modern technology platforms, like AgilLink, will exceed their clients’ need for accessibility, while also creating a better workplace for their employees.
This article and the information contained herein is for general information and education only. It is provided as a courtesy to the clients and friends of AgilLink.
AgilLink is an RBC company and a wholly-owned subsidiary of City National Bank Member FDIC
City National Bank is a subsidiary of Royal Bank of Canada. Deposit products and services are provided by City National Bank.
Curated Wealth, Pathstone, and McKinsey are independent companies and are not affiliated with AgilLink, City National Bank or RBC.