Technology isn't the magic wand for financial advisers hoping to expand their practices beyond portfolio management services.
New tools and platforms can add significant value if used correctly, but most financial advisers are taking the wrong approach by thinking new technology alone will build their business. It's time for some new tricks and some adjustments in thinking.
Financial advisers have never been under more pressure to expand their service offerings, which include tax planning, estate planning and advising on how to prepare for all of life's major events. To begin offering these services however, advisers have rushed to add a myriad of technology platforms into their workflows.
Most are left frustrated, often with disappointing client activation rates, because they're missing the point of what technology can do for them and how it should be used. While tech may help you manage your firm and investment strategies better, clients need more; they're looking for advisers to better understand their lives, challenges and goals across the entire planning spectrum.
It's a mistake if you use technology to put your client relationships on cruise control. Advisers need to use technology to facilitate deeper, more meaningful interactions with their clients. It's through these conversations that they can better understand what their clients truly need, and then offer the appropriate services or consultation.
This may sound counterintuitive, but here are some examples of how advisers can leverage technology to better connect with their clients:
Don't use social media in a creepy way, but there are plenty of social platforms that make it incredibly easy to get to know clients better and find ways to facilitate interesting conversations. Facebook, LinkedIn, Twitter and Instagram all offer unique vantage points into clients' lives beyond their portfolios.
Want to keep things strictly professional? Connect with them on LinkedIn and be on the lookout for shared business interests or challenges. Twitter offers a glimpse into their general mindset or their take on current events, while Facebook and Instagram showcase their personal interests. Also, if clients don't post or even have accounts on any of these services, that's a conversation starter too.
Something as simple as discovering you have kids the same age, are fans of the same baseball team or both think Bruce Springsteen is the greatest performer of all time can be enough to spark a conversation.
Advisers are great at helping plan for the financial aspects of retirement, but what about the other concerns around aging? Long-term health care, affordable housing or aging in place, and understanding changes to health care law and Medicaid are just a few of the considerations.
Depending on your clients' age, they may be responsible for taking care of their parents or grandparents — so understanding their thoughts, questions or concerns are conversations that you can have with almost anyone.
There are a handful of great technology platforms that are incredible resources to help your clients document their wishes on these topics that you can bring to their attention.
Managing Digital Footprint
The digital revolution has created an entirely new set of information collectively known as a "digital footprint." This includes online profiles, digitized documents, photos, emails and of course financial and banking information. Almost everything important (and unimportant) in our lives is now online in some digital form. According to a 2016 study done by Intel, the average consumer now has close to 30 online accounts.
How many of your clients have a grasp on where all of these things are stored? How much of this information do you have properly managed? Your clients' digital footprint begins with their financial information, so advisers should be the first person to extend life and legacy planning and introduce these types of platforms and services to the individuals and families they work with.
Perhaps one day in the future technology will be a "magic wand" that solves all of the challenges facing financial advisers today. But for now, let's not rely on magic. Let's find interesting way of using technology to help create more meaningful interactions with clients, and in turn add some additional value beyond traditional financial planning.
Abby Schneiderman is co-founder and co-CEO of Everplans, a company that aims to transform the way people organize all the details in their life.