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2017: The Year of Financial Planning and Client Experience

The Consumer Revolution is here to stay.

By Anthony Stich

The “Consumer Revolution” was not merely a buzzword that descended upon our industry a few years back and has since vanished.

In fact, quite the opposite has happened. The Consumer Revolution is the driving force behind all the changes you are witnessing within our industry — FinTech and financial services — today. One can make a case that every major trend we have witnessed over the last three or four years were all entirely driven by the consumer, whether it appears that way at first glance or not.

Take, for instance, the M&A activity of 2014. We witnessed a tremendous infusion of capital into our space, and some analysts estimate north of $1 billion was invested in 2014 alone. This led companies like Advicent, for example, to acquire the goals-based financial planning technology company Figlo.

At first, one would consider this activity driven by investment strategies. However, these strategies are actually driven by the consumer. Investors came because they knew consumers are digitally underserved in the financial planning space.

Jump forward one year to 2015 and consider the “rise of the robo advisors.” In this case, it is easy to visualize the correlation between an underserved consumer and a technology fulfilling that vacancy. Robo advisors amassed clients much slower than anticipated, but they consumed the industry news cycle. In turn, the news aided in client acquisition, which resulted in more media and more clients. Now robo advice is here to stay.

In 2016, we witnessed the greatest regulatory impact in our industry for nearly 40 years: the new fiduciary standards set forth by the Department of Labor. The inspiration behind this regulation was certainly driven by what the government defined as “best for the consumer.” Whether or not the new rule sees the light of day is irrelevant; 2016 was consumed by this change, and the consumer played an important role in the conversation.

So, what would one say is today’s trend? What change is the consumer currently driving? At Advicent, we believe it is two concurrent themes: 1) Consumers will begin demanding financial plans, and 2) consumers will demand an exceptional client experience.

The last three years actually set the stage for 2017 (and beyond). Infusion of capital, robo advisors changing the way consumers expect information and the DOL spurning a fiduciary mindset — all three elements of The Consumer Revolution are like a perfect storm.

This chatter changed the way consumers look at how financial professionals should engage with them, and consumers began to change what they expected from the financial advice industry. Gone are the days where financial advisors were “someone that my parents used.” Now advisors are available to any investor, of any age, due to the explosion of fintech. Modern advisors can service the needs of a far larger customer base — even those considered unprofitable — due to the efficiency of data collection, plan distribution and the elimination of the time-consuming, episodic meetings.

As for expecting a superior digital experience? You can blame the robo advisors, but even more so, the "Internet of Things." As a society, we are completely desensitized to how much we are interconnected by way of the internet. In fact, if something is not connected, we become frustrated. This expectation has, rightfully so, permeated financial services. Consumers are now expecting the same interconnected digital experience from the financial professionals that serve them.

Now is the chance for the financial professional to truly become the epicenter of their clients’ financial lives. If our profession gets it together and provides an exceptional digital client experience that includes collaborative electronic data gathering methods, a sophisticated client portal, powerful account aggregation services, interactivity and 24/7 access amongst other features, the advisor can become the fixture that assists in making life-changing financial decisions.

The Consumer Revolution is alive and well, and we can be at the forefront of the next major trend if we act fast enough.


Anthony Stich is director of global marketing at Advicent, a provider of SaaS technology solutions for the financial services industry. 

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