In many ways, the 2019 financial advisor looks just like every financial advisor in history: A model advisor helps clients pursue their goals, makes sound investment decisions, and builds a book of business rooted in client trust.
But in a world where your clients have customized newsfeeds on their phones and can order groceries by talking to a device on their counter, the old way of demonstrating your value to clients isn’t enough. With personalized information everywhere from shopping recommendations to music streaming, you have to predict clients’ needs and anticipate their wants—all while still providing sound advice.
| • | The robot in the family: 72% of people with voice-activated speakers say the device is a part of their daily routine |
| • | Alexa, buy me something: 22% of U.S. smart speaker owners have used their device to purchase something |
| • | Talk to me : Voice commerce sales are projected to rise from $2B in 2018 to $40B in 2022 |
Many advisors think of technology as a threat—the advance of roboadvisors, the risk of a never-ending stream of data. But when harnessed correctly, advanced technology can be combined with a human touch to create new opportunities for you to demonstrate value. In fact, it can help you surpass your clients’ expectations by blowing away the advisor experience of the past. Here’s how to get started.
Invest in data collection
You don’t need to jump into the deep end to introduce new technology to your practice. There are building blocks you can gradually adopt to help you meet your increasingly tech-savvy clients’ expectations. The first of these blocks is gathering the right data in the right format.
Advisors should not only collect client information digitally but also store it in a central location, like a data warehouse, says Ron Carson, CEO and founder of Carson Group. This process allows advisors to track client details, including financial information (such as taxable gains or investment balances). It can also help yield more insight into client goals, actions and behaviors.
| • | Just for you: 73% of investment advisory customers say sharing data should produce personalized advice |
Carson also thinks that how advisors collect data now will make the difference in future capabilities. “The sole focus that advisors should be having now [is], ‘How do I make sure my clients’ data is clean?’” he says. That means entering all information consistently and accurately, then coding it correctly in order to run queries or reports. Taking this care upfront allows advisors to retrieve the exact data they need at any time.
Before they can prepare to leverage any other new technologies, advisors “should be thinking about how to get data in a spot that’s clean,” advises Carson.
Predict client needs—without being creepy
That clean data you collected gives you the ability to provide new experiences that create additional value for clients.
Predictive technology is already a part of many people’s digital lives. You might view a product online, then start to see sponsored ads for the same, or a similar product across your social media accounts. While it can feel strange to have Facebook anticipate what kind of socks you like, this same type of technology can be used effectively by advisors in more subtle (less creepy) ways.
Say you’ve set your data collection to monitor when a client logs in to check their account balance. You might notice that one (or several) of your clients log in every time the Dow drops sharply. Knowing this, you can prepare a specialized message for the client aimed at easing his or her concerns, then set the message to send automatically anytime the market drops more than 500 points.
| • | Reality vs. hype: 9 out of 10 marketers believe their clients and prospects expect a personalized experience, but just 3 out of 10 think today’s companies are executing personalization correctly |
“The service model will allow advisors to anticipate client needs before the client even knows to ask,” says Carson. For many clients, this customized outreach provides a new experience and added value. The same type of predictive actions can help advisors anticipate other client actions—from estate planning to insurance needs to tax preparation.
To add even more value, Carson provides clients with a timeline that shows all the key planning decisions they have made since becoming clients—talk about a conversation starter.
Simplify clients’ to-do lists
The third building block is an extension of the second: Anticipate your clients’ needs so you can simplify their lives. All technology users want simplicity, and investors from individuals to wealthy families increasingly seek out services that provide everything they need in one place and offer the most streamlined user experience.
Carson notes, “We have entered the ‘experience stage’ for financial advisors and business owners.” Many advisors think they’re competing against other financial advisors, he continues, but they’re not—they are competing against high-value user experiences such as Amazon Prime.
What Amazon and other companies like it do so well is make transactions feel easy and utterly seamless. Your clients expect no less from you, and you should be able to deliver that not so far into the future, says Carson. Clients should be able to access what they need through a single-sign-on website or platform. Plus, they should be able to easily access to all of their account information across all of their computers and mobile devices.
Advisors may also want to start incorporating account aggregation—programs that allow clients to consolidate financial accounts from many institutions into a single “dashboard”—into their advisor-facing offering. Banks and third-party technology companies currently offer this capability.
Prioritize trust (and your reputation)
Having technological building blocks in place allows you to focus on your most important asset: client trust. An advisor’s reputation is just as important as ever, says Blaine Aikin, AIFIA®, CPA, CFP®, Executive Chairman at Fi360, a fiduciary education, training and technology company. “Reputation is an often overlooked but powerful tool for advisors to showcase their value to clients and differentiate themselves during a time of fee compression, regulatory uncertainty and other factors driving the industry.”
| • | The future is now: 61% of financial services organizations used artificial intelligence technologies, such as voice recognition and recommendation engines, in 2018 |
Trust is a major value-add when it comes to emerging technologies. “Consumers are increasingly concerned about who has access to their data and are now empowered to take back control of their information,” says Chris Wong, CEO of LifeSite, an online safe deposit box. “So any business providing fintech to clients or using enterprise software needs to be accountable for how information is being processed, transported or shared.” In other words, putting a human face on new technology—especially personalized technology—is a big deal for trepidations clients.
When your clients value you, that high standing infiltrates other areas of your business, too, Aiken notes, offering all sorts of side perks. “A great reputation offers other benefits, including pricing power in an M&A-driven market and is a perk when recruiting top talent.”
Technological advancements will continue to mold two types of advisors, says Carson: the ones who will be disruptors and the ones who will be disrupted. Take the needed steps to ensure you’re among the former.