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Harnessing the Power of Customer Relationship Management Tools

With increased numbers of clients and rising service expectations advisors must squeeze all the efficiency possible from their CRM technology.

The financial advisory industry is evolving, with client demands shifting and substantial demographic changes underway. Today’s investors expect financial advisors to incorporate digital technologies into their client experience and business practices: according to a study by Ernst & Young, 53% of investors report digital channels and self-service capabilities are the primary factors influencing their advising experience. In conjunction with this trend, client demographics are shifting significantly, with 10,000 baby boomers reaching retirement age each day—spurring increasing demand for advisors.

To remain competitive, financial advisors should tap into innovative technologies, including customer relationship management tools (CRM). This digital solution can enable advisors to better position themselves to meet client expectations, take on the challenges of a growing retiree population and continue to grow their businesses.

Investor Needs are Expanding and Evolving

Investors today are looking for holistic and transparent financial advice, specifically tailored to their individual needs and goals and 28% percent of clients, according to the same study referenced above by Ernst & Young, report fee and performance clarity, including real-time portfolio updates, as the main drivers of trust in an advisor. As part of this desire for holistic advice, clients expect face-time with their financial advisor, whether in-person or using a digital format such as video chat. Given that advisor-investor relationships are built on trust, it’s crucial that advisors carve out sufficient time to speak with their clients face to face. This helps to establish critical rapport and investor confidence.  

Adding to the shift in investor preferences, a significant demographic transition is taking place. As life expectancy increases and baby boomers continue to retire, there will be growing demand for financial planning services. In the next decade, the industry is projected to grow 15%, driven in part by the fact that baby boomers control the vast majority of wealth in the U.S. (82% by one estimate). Digital solutions, such as CRMs, can help advisors take on the challenges of a burgeoning retiree cohort, address new investor expectations and provide an excellent customer experience.

CRMs can Enhance Advisor Impact 

According to industry research firm Cerulli Associates, advisors spend more than 20% of their workweek on administrative tasks, taking away precious time that could be spent with clients. Harnessing key features of CRMs, such as auto-populating forms, grouping clients into different workflows to customize messaging, and tracking prior conversations, can help to minimize human error and alleviate administrative burdens—leaving advisors more time to interact with clients face-to-face.

CRMs also better position advisors to scale their businesses, which is a growing priority given the increasing pressures on advisors as baby boomers retire. By streamlining the client onboarding process, while simultaneously improving client account management, CRMs help advisors to manage more clients with greater efficiency. AssetMark’s internal testing shows that opening client accounts with CRMs can be significantly faster than inputting the information manually as the average search and import time with certain CRMs is 30 seconds, compared to about four minutes inputting the information by hand.  

Just as baby boomers comprise a significant portion of the U.S. population, they also make up a considerable proportion of the advisor community, with 41% of advisors aged 55 years or older. Despite this demographic skew, a recent study by the Financial Planning Association in partnership with Janus Henderson Investors reveals that 73% of financial advisors don’t have a succession plan, among which 60% are within five years of retirement. Given these alarming statistics, it’s imperative that advisors formulate plans for how they’re going to navigate this transition. CRMs can play a key role in succession planning by enabling smoother client transfers between advisors. Serving as a centralized information hub, CRMs allow advisors to view client information, as well as prior conversations and investing decisions, helping them get up-to-speed on new client accounts quickly and efficiently.

Advisors today are under considerable pressure to adapt to a changing industry landscape defined by shifting investor expectations and growing demographic demands.  By leveraging the capabilities of CRMs, advisors can tap into a powerful tool to help turn these challenges into opportunities – allowing them to focus their efforts on providing the holistic financial advice their clients want, while simultaneously scaling their businesses. 

Carrie Hansen is EVP and COO at AssetMark, Inc., an SEC-registered investment advisor.

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