Salesforce Financial Services Cloud provides functionalities to create groups of relationships so that you have the flexibility to organize your customers in ways that are meaningful to you. In the householding model, a household typically refers to a grouping or collection of related individuals or entities who share common financial interests and accounts. These related individuals might include family members, spouses, or even trusts and entities that are financially interconnected.
Grouping individuals into a household in wealth management systems allows advisors to manage their financial affairs collectively, making it easier to analyze and provide tailored financial services to the entire group rather than treating each individual separately. This helps in achieving a more holistic view of the client’s financial situation and needs.
Within Financial Services Cloud, households are represented by account records with a different record type than a typical client or prospect record. All members within a household maintain a specified connection back to the household, establishing links among all records and offering relational insights.
By default, you don’t have to specify a relationship to a household when you add a prospect or client to Salesforce. But you can opt to require or create an automation to establish a household association for each client, ensuring that every client has a corresponding household record.
Here we share the pros and cons of the household approach and what you should keep in mind while making this decision.
Pros of enforcing household for each client
Using the household approach enhances the consistency of reporting options and ensures that all clients are linked to a primary group. In practical terms, it means that when you need to generate reports or analyze data, you can rely on the fact that all clients are organized within households, which simplifies and standardizes the reporting process. It also offers a level of assurance that no client is left unassociated, contributing to a more organized and streamlined wealth management system.
Access to a client’s financial relationships and connections will be readily accessible, so whenever you need to understand a client’s financial network, such information will be reliably available and provide a comprehensive view of their financial landscape. This capability can greatly aid in making informed decisions and offering tailored financial advice.
Some wealth management systems require you to group investors into households. If you plan to integrate Salesforce with such platforms, remember that you must make sure it can deal with the household grouping requirement.
Cons of enforcing household for each client
One of the main negatives of a household approach is that additional automation may be required to support the automatic creation or enforcement of household accounts.
Change management may be necessary if advisors are accustomed to handling client data in a different manner and are not currently using households. This adjustment could involve efforts to ensure a smooth transition when implementing the mandatory use of households.
You should take into account the specific client segments that your advisors are catering to. Making households mandatory for high-net-worth segments is a logical choice, but it might not be as relevant for other client segments where there is less interdependency or shared financial management among individuals.
For example, young professionals who have not yet entered into joint financial ventures, such as marriage or partnership, and are primarily focused on personal financial goals. In such cases, the use of households may add unnecessary complexity without delivering meaningful advantages. It’s important to assess the unique characteristics and needs of each client segment to determine whether households are a valuable organizational structure for that particular group.
Considerations for deciding on a household approach
There are multiple ways you can approach the solution:
- Enforce household only when the prospect turns into the client
- Enforce household only for certain client segments
- Automate the creation of household
Make sure you capture all the scenarios and business needs to design a solution and process that will make sense to the user and will not create change management hurdles.
Think about integrations and the systems you are integrating data from and to, and the source of truth for clients and household data. It’s important to ensure your data strategy and governance support the decision of enforcing or not enforcing the households.
Keep in mind your legacy data. If your users did not use households or used them inconsistently, how will the households be generated for existing clients who are not currently associated with one?
Finally, think about how the decision will affect your security model and if there could be a situation when different advisors work with clients within the same household. While that scenario seems unlikely, you should ensure you review such use cases before making final decisions.
