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    technology and the client experience

    Technology and the Client Experience: Current Trends

    Not so many years ago, if a financial advisory firm was able to offer a secure client portal for uploading documents and viewing account information on the website, the feature could be touted as a serious value-add. But now, secure client portals are considered basic. In fact, with advances in online and mobile banking, secure online transactions, and other technology-driven financial solutions, the clients of RIAs and other financial services firms are coming to view “instantaneous” as a baseline for most expectations.

    But it is also the case that the RIAs profiting most from the efficiencies of technology are those with the best focus on real-time client interaction and communication. In other words, it goes back to the phrase coined by Alvin Toffler, author of the 1970 bestseller Future Shock: “High tech – high touch.” In today’s advisory landscape, a successful practice requires both.

    “AdvisorTech”: An Emerging Category … But Is It Working?

    Writing in Michael Kitces’s blog “Nerd’s-Eye View,” Craig Iskowitz underlines the rise of technology solutions aimed at independent advisors. Citing the relatively longstanding popularity of and interest in consumer-facing financial technology platforms like Acorns, Lending Club, and others, Iskowitz notes that a growing number of companies are offering solutions designed specifically to help advisors conduct and grow their business. He offers the term “advisortech” to differentiate this subset from the larger categories of financial technology aimed at consumers or large enterprises like banks and brokerage companies. In the same column, however, he cites a recent J. D. Power survey of brokers, 92% of whom identify advisory technology as crucial, but less than half of whom characterize their firms’ core technologies as “very valuable.” Clearly, there is a disconnect between the simple availability of advisory technology and its efficacy.

    Matchmaking and Communicating

    Advisors may soon be finding new clients via the RIA equivalent of, according to Andres Garcia-Amaya, founder of Zoe Financial, an online engine designed to help prospective clients connect with an advisor most compatible with their needs. And once the client has established a relationship with her advisor, it is almost certain — especially in the age of COVID-19 — that the advisor-client relationship will be reinforced using technological tools for communication. Zoom, GoToMeeting, and other virtual meeting software platforms have rapidly become everyday necessities for most advisory firms, as the traditional face-to-face client meeting has been eliminated by the current public health crisis.

    Robo-advising, CRM, and Changing Demographics

    The rise of robo-advisors, once dreaded as a threat to the human-to-human factor in financial advising, is gradually being folded into the traditional RIA as another channel for delivering appropriate services to specific classes of clients. Though relatively few at present, more and more firms are incorporating “white-label” robo-advising components into their offerings, branding them with the firm and using them as a low-cost, high-efficiency portal for clients who may be — for now — on the lower end of the AUM continuum. In the larger CRM context, 95% of advisors surveyed used some form of technology for maintaining efficient and consistent interactions with clients.

    In the future, as the clientele changes to incorporate more individuals from the GenX and Millennial generations, acceptance of and even expectations for technological solutions will increase the importance for RIAs to stay abreast of current developments. As the industry becomes more digitized and clients demand more real-time access to information and input, it will be increasingly important for advisors to maintain quality communication with clients around important goals and priorities. In an October 2019 article in Investopedia, Dan Egan, managing director of behavioral finance and investing at Betterment, suggests that the advisors who will thrive in the coming RIA landscape are those who are able to help clients focus on what is “really important in their lives… the really good financial planners are the ones who are good at having those tough conversations directly with their clients…”

    Whether you are overwhelmed by the rising tide of the technology component or you are a Zoom master-user, it’s important to remember that the one constant in our industry is the importance of quality client communication. No matter how efficient your technology platform may be, it can never take the place of the personal touch you bring to your client interactions.

    We help advisors successfully brand and grow wealth management practices. To learn more about how we can help you connect more efficiently with more current and prospective clients, contact us at . You can also follow us on LinkedIn.