How Technology Can Virtually (and Literally) Change Your Advisory Practice

How Technology Can Virtually (and Literally) Change Your Advisory Practice

Before you can become a virtual advisor, you must first embrace technology.

Technology continues to be like an avalanche for financial advisors. It is so difficult to keep up with all the innovations. The biggest example of this is the over-the-top reporting about robo-advisors. However, a positive outcome of all the hype has been an added awareness of the way that advisors can use technology to better engage their clients.

We have been researching the new technologies that advisors use to interact with their clients and forming strategic partnerships to induce advisors to become Techno-advisors.

Why should becoming more technology-savvy and -friendly matter to you? It could pave the way to an entirely different way of working.


Case in point

From the research we see, one group that is at the forefront of exploring new technical approaches and business models are young advisors, catering to the Gen X/Gen Y community.


Niche is critical

The passive investment advisor is under pressure these days. Robo-advisors using technology have automated a lot of the role. However, robo-advisors are making little impression on advisors who offer financial planning to specific groups of clients.

A virtual advisor can truly have a national presence, as by definition, they interact with their clients through technology. To market to a national audience requires a different approach, identified and originally explained by Chris Anderson, the editor of Wired magazine, as the “long tail,” his paper can be viewed here.

The basic premise of the “long tail” for advisors is that an advisor firm servicing a local region would need a broad offering to be able to appeal to enough people within that small area. However, if you broaden the region, then you are more likely to be more successful by being very specific about your niche.

An example could be a focus on doctors just leaving their medical training and starting their work lives. The service could focus on education loan management, small business advice, budgeting, and healthcare financial expertise. Build a service like that and it is a tough barrier to entry for anyone to duplicate.

An excellent niche is the Gen X/Gen Y client. They are excited by technology, expect a technical interaction, and have a specific set of financial needs based around starting meaningful careers.

Virtual Advisor Technology

This list is, in itself, useful, as it identifies all the different technology that any advisor firm requires.

  • Internet access for cloud-based applications
  • File storage/sharing
  • Video conferencing/virtual meeting
  • Client/performance reporting
  • Account aggregation
  • Accounting/payroll
  • Cash flow/debt management planning
  • Credit card processing
  • CRM
  • eSignature
  • Financial planning
  • Investment research
  • Schedulers
  • Password management
  • Phone software
  • Rebalancers
  • Social security analyzers
  • Backup programs

Pretty scary – right?

Other considerations

Some of the other obstacles that a virtual advisor must navigate—I am not going to dwell on these, but they include:

  • Compliance: state-by-state compliance is more difficult than if you service a single local
  • Marketing: is now national, so different ways of prospecting are necessary
  • Office space: even if you are virtual, does an office space make sense for the way you work?


A lifestyle and approach that will be followed by only a small proportion of advisors is different and you must be dedicated to pull it off. However, for conventional advisors, there are many things to learn from the ways that he implements his virtual advisor life.


Raef Lee is Managing Direcotr and Head of New Services and Strategic Partnerships at SEI Advisor Network

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