The speed at which a new generation of disruptive technology is influencing consumer preferences and behaviors is unprecedented. Whether we’re talking about advanced artificial intelligence, language-translating earbuds, self-driving vehicles, smart homes, or Amazon deliveries to the trunk of your car, technology is enmeshed in the fabric of our daily lives, to the extent we find it difficult to delineate when or where its influence begins and ends.
Yet, while technology empowers new possibilities, it also exposes fragility in the current way of doing business. This is something the financial advice industry continues to struggle with in serving client needs as highlighted in a recent study from the CFA Institute. The study stated that “client technologies still suffer from legacy systems in which communications and transaction processes are quite primitive. These must be upgraded so they are nimble enough to deliver a sophisticated product to end clients, and simultaneously simple enough for customers to interact with them.”
Why does this matter to investors?
Why should you care if the firms managing your money are leveraging the latest systems and technologies in serving your needs?
The answer is simple: if your advisor isn’t investing time, energy and resources in their business, they’re not invested in serving you. For decades, financial services offerings were largely homogeneous. Not only was it hard to differentiate between product and investment platforms, but we saw little differentiation in client service models. In recent years, advancements in technology have allowed advisors and their firms to adopt new ways of delivering client value to offer more personalized, transparent, relevant and cost-effective solutions for a broader range of increasingly complex client needs. As a result, those firms committed to putting their clients first are not only attracting investors in droves, but creating the scale required to deliver the kind of highly customized experience clients demand. In short, they’re positioning themselves and their firms for future growth, and that’s a good thing for clients seeking personalized and relevant advice for the challenges they face in a rapidly changing global economy.
So, how do you know if your advisor is taking the transformative leaps required to serve you in the way you deserve?
For the answer to that, I recently sat down with Charles Koch, CEO of Koch Industries, a man who has lived through dozens of transformative economic periods in his lifetime to discuss what it takes for a company to sustain success during eras like the one financial services is currently experiencing. While Koch Industries is a multinational organization with several subsidiaries in industries like manufacturing, energy, fiber, ranching, and finance, my talk with the 82-year-old billionaire showed me that the same two traits that make or break a successful business – adaptability and culture – are also the same two traits investors should be considering when measuring up their advisor.