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Technology’s Impact on the Client Experience

Fintech tools like robo advisors should not be viewed as competition; they actually help advisors and clients better communicate and interact.

By James Capps

Advisor businesses are growing in both client numbers and geographical reach. Investors typically find advisors through personal referrals, but increasingly use online searches and social media to make a connection. One study found 65 percent of clients research potential advisors through social networks, and 86 percent use those networks to help in their buying decisions.

Some call it the “consumer revolution,” where clients are becoming collaborators in their financial planning. Fintech and social media train investors to expect efficiency, transparency and accessibility. Rather than a relay of information from advisor to client, limitless information online and booming client-focused technological innovation enables the client to exchange ideas with his or her advisor.

A recent survey by Accenture Research found 88 percent of advisors believe their clients are more knowledgeable about the investing process and the available product solutions than they were five years ago. And clients’ hunger for data seems robust. Nearly half (49 percent) of the advisor respondents reported being asked by clients for information and research the firm doesn’t routinely provide.

Savvy advisors are adjusting to these trends. They are providing interconnectivity to their clients through online dashboards, allowing users to easily perform common personal finance tasks. When a client changes a goal, or sets up a new savings plan, the advisor is notified and then prompted to reach out to the client with guidance around the decision. The advisor’s attentiveness is key, because even though clients are wielding more power, they may not know exactly what to do with it. As clients are becoming more informed, conversations with their advisors can reach new levels of depth and strategy.

To make the most of the changing landscape, it’s important to think through your technology and how it impacts your client experience: Maintaining personal contact with more investors on their terms and across farther distances requires the latest technology.

A recent CapGemini survey reveals that 64 percent of affluent investors expected their financial management relationship to be digital in the future. Even more striking, 65 percent reported that they planned to leave their advisor if a tech-integrated experience would not be provided.

In the general dematerialization of your office operations—through paperless client files, e-signatures, online portals and video meetings—it’s vital to ask how are client experiences affected? In the new digital age, how do you remain an important influence in clients’ lives?

Multiple points of contact are imperative. Social media and online networking may seem distant, impersonal and unprofessional. However, the demand for more channels of communication is rising, and the increase of users on social media suggests independent advisors would benefit from incorporating a well-thought-out social strategy. Nearly two-thirds of advisors say they have used social media to interact with clients, according to the Accenture survey. Of course, investors’ preferences differ, so it’s necessary to ask what they want or expect from you in terms of communication.

As investors become collaborators and the common, perhaps somewhat casual, acts of video chatting and tweeting make their way into the financial planning setting, advisors have an opportunity to show clients depth in relationship building and industry knowledge.

According to a recent survey by Northwestern Mutual, 43 percent of investors getting professional help say they don’t feel a long-term, deep relationship with their advisors and they aren’t receiving tailored attention.

To reach clients effectively through technology, you might first develop a strategy to use digital and social platforms. Begin by asking yourself: “Who exactly am I helping?” “What kind of familiarity do they have with technology platforms?” and “Are they connected to and actively using social media?”

There’s a gap between the supply and demand for digital tools and social media connections in the financial advising business. Seventy-seven percent of advisors say clients want more communication channels while only 62 percent of advisors are using social media with clients and just 54 percent feel their firm is doing enough to meet client expectations.

Increasing points of connection and easing the path for investors to find or interact with you can address the gap. You might create an online onboarding workflow, where clients can plug in data and create goals to get a quicker start on their financial progress with you. Intuitive platforms like GoToMeeting for virtual meetings and Bookeo can assist the logistics of building client relationships.

Another perhaps more controversial tool is the digital advice platform. Commonly known as “robo advice,” the technology is sometimes judged as an advisor’s competition—an innovation that puts too much emphasis in quick, cheap advice and neglects the personal attention and specialized services live advisors provide. Advisors should resist the urge to shun digital advice and consider using it to help address investors’ desire for efficient responses to their needs. There are options to white-labeling a platform to offer performance reporting and other benefits of the contemporary system, all under your brand. Using a digital investment solution may also be an efficient way to keep smaller accounts profitable.

With social media platforms (the most used being LinkedIn and the most viewed being Facebook and Twitter), there are opportunities to engage with niche markets by joining groups or sharing relevant information for their education. For example, using the “Trends” tab and hashtags on Twitter, you can find popular topics of conversation in the industry, ask questions, gain perspectives and comment with your own expertise. Investors searching for answers to their specific questions online might be attracted to your practice as they read and trust your voice. Authenticity is key, so potential clients can start getting to know the feel of your practice.

Be careful not to comment on specific financial strategies, in compliance with the FINRA rules, or lead into posts with a disclaimer if shared content includes some advice. Consider using a communications archiving system like Smarsh to keep records.

In a highly personal field where client experiences affect big-money decisions, one might assume opting for digital communications would create distance in relationships. However, it now happens that investors and advisors can find creative ways to use technology to their advantage and quickly reach greater levels of mutual understanding and strategic planning.

James Capps is Chief Technology Officer, Trust Company of America.

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