This week marks Manning & Napier's 50th anniversary. Fifty years ago, our business was founded with unique investment strategies and a determination to always put clients first. Our guiding principles have remained the same over the last half-century, and we have continued to adapt to meet the needs, goals, and hopes of our clients.
The wealth management industry has undoubtedly changed over the last half-century and will continue to evolve and change over the next 50 years. Our 50th anniversary sparks significant pride for us, and we would like to share our thoughts on the history of financial planning and how it has changed.
Personal Touch
For decades, traditional financial planning was not an accessible solution for average households. Customized financial advice was reserved for the ultra-wealthy who could afford it. Over time, planning became more accessible and customizable on all levels. More families and businesses at all income levels now seek this kind of advice as a standard approach to success. The conversations are no longer just for men, as women control more and more financial decisions, and two-income households become the norm.
Today's financial planning is much more tailored to the individual or organization, taking a more distinct shape around a client's diverse needs. This level of personalization adds tremendous value. Investment firms can now create a financial blueprint for your future, taking all your needs into account and adjusting to ever-changing financial markets.
One thing that has remained constant is the relationship that individuals and their families have developed with their advisors and firms. There is something invaluable about having a personal connection to an advisor; having those face-to-face meetings gives a sense of reassurance that can’t be achieved with an automated, ‘one-size-fits-all' service. As we’re seeing now, technology can help create and maintain that personal connection, even if meeting face-to-face isn’t an option.
The Technology Advantage
Now more than ever, technology is driving how our industry does business. Your financial advisor can team up with the other professionals you work with (e.g., your lawyer or accountant), to provide a seamless solution, and those seamless solutions benefit from more adaptability and greater information than ever before.
Financial plans are no longer a stagnant proposal; they have become breathing, adaptive entities. Technology has simplified the creation and availability of a basic plan, creating greater efficiencies, and giving an advisor more time. This allows for more in-depth, sophisticated planning conversations. Adding the use of digital tools allows for more dynamic and quick updates, adjustments, or complete changes.
With more technology comes more information, and your financial planner now has access to endless resources to answer your questions. Planners are often CFP certified (Certified Financial Planners), and they are held to a higher standard of knowledge. The level of advice CFPs provide today is a higher quality than what many would have received several decades ago. These professionals can be a resource for more than just investments and can be your go-to for tax planning, estate guidance, inheritance, and more.
Lastly, while the quality of advice has improved, clients are still looking for advice from someone who is on their side. That is why it is recommended to work with an advisor that is a fiduciary. Fiduciaries are required to always act in clients’ best interest. Seek out an advisor with a strong code of ethics and a track record of transparency.
Client Needs Have Changed
While technology and personalization has helped firms create better, more clear financial plans, at the same time, financial planning has become much more complicated. Today, financial planning is an irreplaceable service in clients' lives.
Fifty years ago, financial planning was much simpler. Defined-benefit pension plans and Social Security made up the bulk of retirement income. These plans were employer-sponsored, employer-managed, and the responsibility for saving for retirement was not with the individual. General advice from their employers was sufficient to prepare for retirement needs.
Today, individuals are much more responsible for self-funding their retirement and other financial goals. The multi-decade shift from defined-benefit plans to defined-contribution plans shifted the burden of saving for retirement from employers to employees. Individuals are now expected to understand and efficiently use IRAs, 401(k)s, 529 plans, and more, to meet financial goals, with little help from employers beyond contribution matching and generic financial advice.
Additionally, as time goes on, tax and estate laws have only grown more complicated as well. For financial planning, estate planning, and tax planning needs, it’s vital to seek out a professional who can navigate the complexities.
Moving Forward
As Manning & Napier prepares for the next half-century, we look back on the time-tested investment strategies that led us this far.
Our team of Financial Consultants and planning professionals works closely with our investment team to create a holistic wealth management solution, one that is prepared to meet your goals, no matter how outside factors change. Financial planning needs to be proactive, not reactive, and armed to take on whatever changes come.
We are as prepared as ever to deal with the uncertain and will continue to put our clients first. We look forward to working with all our partners in the next 50 years.
