Often, you have been told to focus on millennials and attract their attention with your online presence. Recent surveys have also revealed that youngsters are not looking for robo advice but they want an advisor with strong online presence.
The financial advisory landscape is changing and consumers’ expectations about what they want from and how they want to work with their advisors are changing too. A whitepaper published by SEI shares interesting insights on virtual communication and services with a close look at the needs of today’s investors and how advisory firms are keeping pace. Technology has become a necessity for advisors to build and maintain relationships with clients.
Another survey by Investment News shows that advisors ranked client experience as a top consideration when investing in technology. For advisors, harnessing technology correctly is a tool for client retention as well as productivity and growth.
So where are you on the technology spectrum? At one end of the spectrum is the high-touch/low-tech advisor who avoids technology when it comes to client relations. At the other end are robo-advisors, a 100% technology and algorithm-driven investment solution. The whitepaper suggests most advisors be somewhere in the middle, i.e, becoming a techno advisor.
Here is the difference between virtual and techno advisors. Virtual Advisors conduct their entire business via the internet, not face-to-face meetings. On the other hand, most advisors are not ready to take a giant leap to give up their office space and function entirely online. These advisors should think about becoming a techno-advisor, which we define as the new breed of professional who use technology intelligently to deepen client relationships.
A typical practice can be enhanced by technology tools and solutions in a variety of ways. For example, today’s advisor may already be on the path to becoming “techno” and not even realize it. The report shows six main businesses in the technology categories:
- Client Meetings (e.g., videoconference, scheduling)
- Client Services (e.g., digital lockers)
- Client Interaction (e.g., co-planning)
- Techno-marketing (e.g., social media, digital advertising)
- In-house efficiency (e.g., workflow, optimized technology spending)
- Client Reporting (e.g., vault, goals-based reporting)
Let us take a look how advisors value technology in their business. The report says while most advisors acknowledge that CRM software, automation and workflow processes have streamlined their businesses; conversations about technology-based relationships often evoke emotional responses. Some view videoconferencing, online chatting and video blogs as marketing gimmicks or obstacles that interfere with the personal client/advisor relationship; that somehow these high-tech tools diminish the advisor’s humanity. Others regard these same tools as powerful ways to bring people closer together more regularly and conveniently to help solve clients increasingly complex financial challenges.
Either way, advisors’ comfort level with this technology is rising. Among the 679 participants in an SEI-sponsored survey conducted in April 2015, nearly two-thirds (63%) claim to use technology easily. What’s interesting is that none of the respondents hate technology.
When asked what technology tools they used to interact with clients, participants ranked by frequency of mention (after phone and email) financial planning, social media, investor portal, online and document storage. About one-third (30%) use texting while 8.7% use client-focused mobile apps.
Your transition from a techno-phobic to tech-enabled is a crucial one. Like all progress, the journey towards greater productivity starts with a single step. Most of these steps don’t involve capital expenses but a willingness to think like a Techno-Advisor.
To start with, segment your existing client base. Survey your clients and ask who is open to meeting using virtual communications technology. Identify clients and prospects who are willing to work with you in this manner. For testing, start with a specific group, such as your younger clients. Start to document the way your clients want to interact in your CRM. Look for how groups of clients want to interact and build your services that way.
Remember that you have a benefit of adding personal touch to your services. To tap young clients, technology is a medium to get through them. We hope these tips will prove useful in building a solid practice.
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