Client access to information has changed the adviser paradigm

Jan 29, 2014 @ 12:00 am

Runtime: 5:29

Rob Dearman of National Planning Holdings describes how investors are rapidly adopting technology, meaning advisers must build and deploy the best tech tools possible to best serve this evolving client base.

Video Transcript

Technology is indispensable for our vision. Part of the reason is in our firm technology is a cornerstone to how we define our value, right. So, you need unfeathered product access. You need very competitive economics and compensation, but then technology is a cornerstone because technology is the way that we deliver efficient and scalable costumer service. Ultimately, we're in a business that is built on a chain of trust, right. The trust relationship comes from communication. Now, to scale communication today, I have to be good at technology. I can't-- I can't scale responsive communication about your book, about your 72T, about your social security, about your healthcare benefits. I can't scale it efficiently without technology anymore. So, we're very, very serious about our technology as a differentiator because we know that our rep's customers are demanding it. You know, you can no longer expect for your client to walk in with a shoebox of statements and just lay it on your table and say, I'm a mess, figure it out for me. That's not the way a lot of clients-- even boomer clients are acting today. They're using more of the validation model. In the olden days, it was doctors, lawyers, and engineers, right. These were the people who would do their homework and they would come in and they really challenge on, you know, what is the difference between alpha and excess returns, right. What is this AIMR compliant performance reporting? But now, almost everybody has that same level of access, right. So, in the olden days, we were playoff of what I call information asymmetry. I'm a specialist like the doctor, like the mechanic, like the lawyer, like the financial planner. I'm the expert. You don't have access to the information I have and therefore you have to trust me. That's not the rules of the game anymore, right, because they have real-time access to check you out, do their homework on your recommendations ahead of time beyond just going around the corner to one of six other financial planners. They can do it right there from their phone, right. And these investors are adapting technology at a rate in some cases that are even greater than our advisers, right. So, for example, it took 38 years for 50 million users to use radio. Okay. To get to the 50 million mark, 38 years for radio, 13 years for television, 4 years for the internet, 3.5 years for Facebook. How long do you think it took for the Draw Something app to get 50 million users? 50 days. So, the rate of adoption, the rate of technology adoption is actually accelerating over time, so we now that adequately served investors we have to be able to build and deploy tools through our advisors to create the customer experience they're demanding. So, the rate of adoption of tablet devices has outpaced the rate of adoption of smartphones whether you're looking at iOS or android. In fact, It's outpaced by 3 times, okay. They're selling iPads, for example. They're selling it 3 times the pace that iPhones did in this part of the maturity cycle. Why is that? Well, part of it is just how you want to interact with your data and how you want to interact with the functionality of your application. If I've got my iPhone, I partake in what I call data snacking, right. Quick lookups. What's the rate of return? What's the transactions over the last 30 days? Did the check clear? Is that ACAT done? Is the ACH processed? However, if I actually wanna collaborate, if I wanna learn something, if I wanna share something that needs perspective and context, it's very difficult to do on that form factor. And so, what we see is that for professionals, the tablet is being adopted so much greater because it's so much more versatile. I can do data snacking, but I can actually act on that data and I can collaborate with it. And I can use it for my own self education, so there are so many more mobile use cases that are driving, that increase rate of adoption. The second thing though is the sort of executive jewelry factor, right. So, I'm starting to see people wearing the Samsung smartwatch and you've seen people wearing Google Glass I'm sure. There is a coolness factor. And when someone goes to an adviser, they wanna believe that that's adviser is keeping up, that he's using the latest and greatest data in technology to do the best job possible for the client, right. And so, dropping 499 for an iPad is a quick way to create a perception that you're keeping up as well. And we believe in any professional services that's why you're seeing some of the sort of executive jewelry showing up. But whether rubber meets the road though is what sort of customer experience you're creating with it.

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