Despite tremendous growth in automated investing technology, there are still many advisors not willing to cede control of clients’ portfolios to a so-called robo advisor.
But they would be making a mistake to completely eschew new technology, said John Anderson, the managing director of practice management solutions at the SEI Advisor Network. SEI’s research found that the majority of U.S. investors want to be able to discuss financial matters online.
Instead of adopting robo-advisor technology, Anderson says modern firms should aim to be a “techno advisor,” one that uses technology for scale and client relationships instead of asset allocation. But with so many options available, many firms just don’t know where to begin.
Anderson said advisors should start with a survey of their client base to identify which clients and prospects are willing to use technology and what they want. These clients can be a test group before fully rolling out technology to the rest of the firm.
One of the easiest ways a firm can add technology to their practice is with video conferencing. According to Raef Lee, the managing director and head of services and strategic partnerships at the SEI Advisor Network, 70 percent of the advisors SEI surveyed are already video conferencing with clients in some capacity.
When choosing a video conferencing product, Lee said the top consideration for advisors is how easy it is for clients use. The best services don’t require the client to download any software or set up a conference ID, and the product should have mobile abilities. Lee said that among advisors, GoToMeeting is the most popular choice.
Once advisors choose a solution, Lee said there are a number of things an advisor can do to be successful with video conferencing.
Another way firms can become techno advisors is to add online appointment scheduling to their websites to eliminate the back-and-forth of booking time to meet with clients. Seventy percent of advisors don’t use scheduling software, but Lee said these programs can plug right into an advisor’s website and puts the client in control of picking a time.
There are several products on the market, and Lee said advisors should look for one that integrates with their personal calendar and comes with the friendliest user interface for clients. Advisors should set the program to not allow same-day appointments or back-to-back meetings, and Anderson added that advisors should start using a scheduling program for specific tasks before expanding it throughout the practice.
A service only a techno advisor could provide is “digital asset protection,” which is sort of like estate planning for all of the stuff clients now own online: social media and email accounts, websites, online access to financial data, and even media like photos and videos stored in the cloud. In the event of emergency or death, the techno advisor can be trusted to handle a client’s digital affairs to relieve some of the stress from the grieving family.
“This is a service that you can provide to your clients that will give you a deeper insight into their lives,” Lee said, adding that it’s an inexpensive way for an advisor to brand their practice as tech-savvy. “Digital asset management is worthwhile in everyday life as it ensures one secure place for information about an individual’s digital life.”
Anderson said that if this is a service that would make sense for an advisor’s clients, products like Estate Assist, Everplans, SecureSafe and DeathSwitch are good ones to look into.
“Document the stated goals and if applicable, share these with the client’s attorney or whomever your client deems as their ‘digital executor,” Anderson said.