AI, social media have an important place in the advice world

Experts discuss how technology disruption can help advisers meet changing client expectations

Feb 23, 2018 @ 2:13 pm

By Ryan W. Neal

Technology is fundamentally shifting societal norms, expectations and behaviors, and advisers must adjust to them if they want to survive.

Just consider what we used to tell children about getting into cars with strangers, said Sunayna Tuteja, director of emerging technologies, innovation and strategic partnerships at TD Ameritrade. Less than 10 years ago, there were ad campaigns warning about "stranger danger." Now people download apps to help them summon strangers to their location for a car ride without thinking twice.

"They are going to bring those same expectations to financial services. We have to meet them," Ms. Tuteja said during a panel on social media and technology hosted by the Securities Industry and Financial Markets Association on Thursday.

That's why TD recently announced it would allow customers to buy and sell stocks and ETFs using direct messages on Twitter — to engage with millennials on their terms.

But Ms. Tuteja said firms can't forget about the other generations they serve, just to keep chasing millennials. TD isn't going to shut down it's call center because it has Twitter now, even if it adds complexity to the overall business.

"We talk about personalization, but part of that is giving consumers the ability to decide where they want to engage with us and how they want to engage with us," she said.

The next big disruption for the industry, according to Salesforce executive strategist Adam Brown, is artificial intelligence. Mr. Brown said companies in other industries are already using AI to sift through data to find "nuggets of wisdom" to drive better decision, such as Hollywood executives monitoring social media to predict how a movie will perform.

(More: Salesforce partners with IBM Watson for AI use in CRM)

He said companies that employ AI are two-and-a-half times more likely to be high performing in their respective industry.

Advisers can get ahead by using AI to automatically collect data about clients and prospects and generate business decisions. Mr. Brown said there is a false perception that people don't talk online about needing financial planning. They talk about life events — buying a house, sending a kid to college, planning a vacation — that are triggers advisers can use. With AI, advisers can get automatic notifications when a client talks about these events, as well as what sort of actions they can take.

Successful advisers already are doing this manually. Jacob Dunn, senior vice president and private wealth adviser with Merrill Lynch's private banking and investment group, said he used digital tools to push content to clients during recent market volatility. From the 63 households he serves, Mr. Dunn said he got zero phone calls.

David Tam, an Edward Jones adviser, said he uses information about layoffs in California to find possible connections on LinkedIn for 401(k) rollovers. Deanna Quitanilla, vice president and investment officer with Wells Fargo Advisors, said she connects with clients on Facebook to get personal information that could lead to business opportunities.

According to Richard Franchella, managing director and complex manager at Morgan Stanley, using these social media and other intelligence tools is no longer optional for advisers. Video conferencing, aggregation — both of financial data and personal information — and modern communication tools like texting are mandatory for advisers to adapt to a changing society.

(More: Morgan Stanley to let financial advisers text clients)

"If we know their desired outcomes, we can make them happen," Mr. Franchella said. "If we don't, they'll go out and open accounts everywhere."

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