Meeting clients' high-tech expectations

Financial advisers focus on ease and mobility for customers

May 22, 2017 @ 6:00 am

By Liz Skinner

Clients who rely on Amazon's Alexa to order dog food on command and Venmo to instantly transfer cash to friends are not going to be satisfied with a financial adviser who promises to answer account questions in a day or two.

As online retail and service experiences evolve in other areas of their lives, clients are demanding more interaction with their finances, requiring swift action from their advice firms.

"It's no longer where clients want to go into the adviser's office and meet with them in the traditional manner," said Mukesh Mehta, chief information officer at AssetMark. "More often they want to do that with social media, they'll want to use chat, instant messaging and all kinds of new tools."

The most innovative advisory firms are investing in consumer-facing technologies, according to the new 2017 InvestmentNews Adviser Technology Study.

These include client portals that incorporate aggregation tools so an individual or family can get a global look at their financial situation. Other emerging technologies include digital onboarding and other paperless efforts, as well as mobile-focused communications, such as video conferencing and screen sharing.

More than three-quarters of advisory firms offer clients a portal where they typically can view portfolio performance reports, aggregated account information and store digital versions of important documents, such as wills and passports.


About a quarter of advisers report their clients use the portals at least once a week or more and 60% of clients use them once a month or more, the InvestmentNews technology study found.

Advisers are seeking to make more sophisticated technologies available to clients on their portals.

"Advisers want tools that allow them to work at a more granular level with clients so they can provide more value," said Stuart DePina, president of Envestnet Tamarac.

To be able to drill down and provide a detailed analysis, advisers need a full view of client assets, and that includes assets not managed by their firm, he said.

Firms like Envestnet are helping advisers attain this global financial picture of client assets and are working on making the tools predictive. Imagine if, after receiving an alert, an adviser could then communicate with clients about certain investment needs before they came to them with such questions.

"The aggregator tools have probably been the tipping point in terms of making client portals more relevant to investors and advisers," Mr. DePina said.

Another area in which firms are investing to attract clients who crave a more digital experience is client account opening.


About 37% of "innovators" – advisory firms which, based on a set of criteria, are defined as businesses that use technology to the fullest – offer digital onboarding and account opening, according to the InvestmentNews study. That compares with about 18% of firms ("non-innovators") that do not use technology to the fullest.

Revenue yield on AUM (median)0.76%0.74%
Revenue per professional$511,000$487,000
Revenue per staff$272,000$252,000
Clients per professional7959
Clients per staff144115
Does your firm utilize the following technologies?
Fully digital account opening and client-onboarding processes
Electronic Signature (eSignature) software
Client-facing portal
NOTE: Innovators are firms in the top quartile of a composite score based on the following: number of core softwaresolutions; level of integrations; technology spending as a % of revenue; planned core software upgrades; and a qualitativescore based on frequency of vendor evaluations and whether the firm offers a client-portal, fully digital accountopening, eSignature software, mobile-web optimization or robo-advice.
*Values are averages unless stated otherwise.

A whopping 77% of innovator firms use eSignature, which offers digital verification of the sender's intent to sign a document, compared with about half of all advisory firms.

The introduction and acceptance of robo-advisers, or digital financial advice platforms, in recent years has hastened the adoption of these digital tools by the industry, said Matt Sirinides, InvestmentNews' senior research analyst.

The client onboarding process has for decades been a paper-intensive and time-consuming problem. Robos have automated this process, thus making traditional firms that require clients to sign 20 forms at their offices seem antiquated, he said.

"Advisory firms should seek out technology solutions that offer an elegant, paperless and speedy onboarding experience, and begin integrating web-enabled tools and dashboards that delight clients," Mr. Sirinides said.

Communications is another area where advisers are boosting their technology.

Advisers must continually assess how they are meeting the needs of clients, which includes their ability to communicate with them in the ways they prefer, according to the the InvestmentNews report.


About 65% of advisers today use some type of video-conferencing technology and 34% use video chat software internally or with clients, the survey found.

Ben Lilienthal, chief executive of ScreenMeet, which is a mobile screen-sharing tool that doesn't require clients to download an app, said advisers looking to improve the client experience need to remember that technology can also deter clients if they can't figure out how to use it.

"Simplicity and ease of use is key for the user," Mr. Lilienthal said.

One common barrier to the adoption of online meetings for advisory firms has been software that is too difficult to use, he said.

Many advisers also recognize the importance of making their tools work on mobile devices.

About 69% of advisory firms' websites are optimized for mobile use today, according to the InvestmentNews tech report. That's up from 44% just two years ago.

This illustrates the importance firms are placing on providing a consistent experience and a professional first impression for clients or prospects across all digital platforms.

It's not hard to imagine the negative opinion a prospect might come away with if they open a firm's website while sitting in traffic in their car, only to discover that the site hasn't been optimized for smartphones, the report said.

Clients expect to be able to access their account information from any device they are using, at any time, said Christine Cataldo, chief operations and technology officer at Edelman Financial Services.

"The digital and mobile bar is much higher than it used to be," she said.


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