A study conducted by Independent Advisor Outlook survey conducted by Charles Schwab, a financial services firm based in US, says that 94% of advisors think that technology will help them serve more clients.
More than three quarters of advisors believe technology will allow them to serve more clients in future, shows an Independent Advisor Outlook survey conducted by Charles Schwab, a financial services firm based in US, among 957 advisors.
When asked about the benefits of adopting technology, 93% advisors agreed that client’s documents will be handled digitally in future. When asked whether increasing use of technology will reduce face-to-face interactions with clients, 51% agreed that one-to-one interactions will tend to reduce. The technological advancement is likely to change the way advisors operate. The study says that 78% people will operate their business practices differently as compared to today.
Gajendra Kothari of Etica Wealth Management says, “The face-to-face interactions will tend to reduce due the increasing adoption of technology. Nevertheless, technology will benefit both advisors and clients as it saves time and reduce paperwork.”
However, advisors will have to face certain challenges while adopting technology in a big way. Here are some of the challenges advisors could face over the next 10 years:
- Implementing changes to service model to meet evolving client needs/demands
- Upgrading and integrating technology systems
- Finding and retaining talent
- Keeping up with new compliance demands
- Maintaining a formal marketing program
To overcome some of these challenges, Kothari says that advisors should educate clients to adopt technology. “The main challenge lies in the mindset of investors. Thus, during the time of onboarding we need to make sure that we educate them about the importance of using technology,” says Kothari.
Besides, the study says that the compliance cost for advisors in the next 10 years is likely to go up and get more complicated.
Financial advisors believe that the situation is similar in India. Jayant Vidwans of Vidwans Financial Advisories says, “As SEBI is trying to replicate the regulations of foreign countries in India, I believe the compliance is likely to get stringent. I believe distributors are going face a lot of challenges but the changes are necessary and here to stay.”
