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There’s industry agreement that human advisers’ jobs are relatively safe from robots. However, there’s also agreement that advisers need to adopt new technologies to stay competitive.
“I truly believe [technology] is going to be the very thing that ensures longevity in our profession,” says Danielle Fava, product strategy and development director of TD Ameritrade Institutional.
“I think as investors are learning so early about financial advice they are much more likely to interface with a financial adviser in the future when their wealth grows and their needs become more complex.”
During a webinar hosted by Financial Planning about the latest digital wealth management tools for advisers, Fava and other industry experts discussed how advisers can stay on top of emerging digital wealth management trends and tools and make their practices more efficient.
AUTOMATE MUNDANE TASKS
Anything in an adviser’s daily routine that can be automated should be outsourced to technological tools, says Alan Moore, co-founder of XY Planning Network. According to Bloomberg, 58% of an adviser’s role can be automated with artificial intelligence.
Not only will that save advisers from mundane, repetitive tasks, Moore says, it frees them to focus on their clients, the actual service that sets them apart from digital-only robo advice.
“Clients are not coming to [advisers] because they are the best at opening an account or the best at rebalancing,” Moore says.
Fava agrees, suggesting that rather than trying to best robo advisers, advisers should shift their focus to aspects of their organization that requires a human touch.
“[Some companies] are saying, ‘What I am selling is not investment management. What I am selling is a relationship,’” she says. “[Those advisers] are figuring out how to repurpose their value and that is really imperative.”
There are tools already that can simplify relationship building with clients too, says Sean McDermott, project manager at research firm Corporate Insight.
Virtual meetings can take place anytime via video chat and chat bots can help answer routine questions. In his research McDermott says he’s found a growing number of advisers using video chat for initial consultations and their clients are satisfied with telephone consultations afterwards.
Another easy automation is password management software, McDermott says. Using that tool is simpler than trying to remember 70 passwords or having to input and look them up individually on a spreadsheet, he says.
Using the app, Moore says he learned he wasted time playing email and phone tag with clients, so he installed a client portal for his practice. The portal allows advisers and customers to track financial goals and schedule appointments. When advisers are on the same page with their clients about goals, he says, meetings are more effective.
“Data monitoring is key to communication,” McDermott says.
NEW TOOLS, NEW CLIENTS
Large advice firms are aggressively investing in digital advice operations and introducing new technologies to make the advice process more efficient, such as Cetera’s new facial recognition software feature.
Corporate Insight’s McDermott notes that client demographics are changing too — not only is the future client going to be younger, they will also be savvier about their financial behavior, he says, and about the services they elect to manage their wealth.
RIAs need to take heed of such trends, says XY Planning Network’s Moore, especially older firms that have been resistant to change.
Moore acknowledges that there are many firms doing financially well and their current customers are happy without having to evolve their practices. But that isn’t sustainable, he adds.
“Advisers have to understand that the future of financial planning and our profession in general is very much what we like to call the cyborg adviser,” Moore says. “We are just going to get better at what we do. We are going to become more efficient and provide greater value to more clients. But technology can’t be rejected. It’s here to stay.”
