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A Hybrid Approach to Enhancing the Advisor-Investor Dynamic

Rather than viewing digital tools as a threat, advisors can capitalize on them to build client relationships.

Research suggests that the growth of digital wealth management technology is creating an expectation from investors that advisors use technology to deliver exceptional client experiences that not only provide a holistic financial picture but also allow clients access to educational insights. However, rather than presenting a challenge, this trend provides an opportunity for financial advisors to strengthen client relationships and differentiate their businesses by incorporating digital advice into their service models. Harnessing an advisor-guided digital advice solution, which combines convenient investment management technology with personalized human insight, can help advisors more efficiently position clients to reach their financial goals. Moreover, investors already demonstrate a preference for this type of hybrid service model—68 percent of U.S. investors desire financial advice that combines advisor expertise with the accessibility of online resources.

By embracing the potential of digital tools, advisors can deliver the type of hybrid experience clients seek while better positioning investors to reach their unique financial goals. When leveraging digital advice solutions, advisors guide clients through a consultative online investment selection process that naturally delves into an individual’s current financial situation, long-term objectives and risk preferences. This built-in opportunity to have frank and holistic client conversations enables advisors to select and implement an investment strategy that is holistic and goals-focused. Given that many investors prefer to discuss their portfolios in the context of their personal objectives rather than performance alone, advisors who incorporate digital advice solutions into their practices will be inherently positioned to connect with clients in a manner that truly resonates.

In addition to providing insight into investors’ financial lives, digital advice solutions can also help increase clients’ engagement with the investment process. By working collaboratively with their advisor to create a fine-tuned portfolio online, investors are able to participate in the financial planning process in an accessible and transparent manner. Also, digital advice solutions often provide online portals where investors can easily monitor their portfolios and track progress toward their financial goals from any device—an appealing capability for today’s investors who are often looking to engage with their personalized financial plans independently, digitally and intuitively.

Beyond providing investors the personalization and accessibility they desire, digital advice solutions open the door for advisors to drive efficiency within their own businesses. Portfolios offered through these types of digital solutions streamline the investment selection process and automatically account for risk management, freeing up advisors’ time and resources. Leveraging the diversity of portfolio options offered through digital advice solutions also enables advisors to efficiently implement thoughtful financial plans for a wide range of low-complexity and fee-sensitive investors. Finally, digital advice solutions often provide a centralized dashboard where advisors can conveniently monitor their client’s financial progress toward their unique goals to ensure that portfolios remain on track.

Rather than perceiving the rise of digital financial tools as a threat to traditional roles and investor relationships, advisors can capitalize on this trend to fortify the advisor-client bond. Not only does incorporating a digital advice solution provide an opportunity to double down on clients’ financial goals and create the engaging business model investors desire, it enhances advisors’ ability to scale their businesses for long-term success.

Matt Matrisian is Senior Vice President, Strategic Initiatives, at AssetMark, Inc., a SEC-registered investment advisor.

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