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How to offer the ideal hybrid digital adviser

What advisory firms can learn from online retailers about combining digital technology with human advice

Aug 27, 2018 @ 5:11 pm

By Ryan W. Neal

The digital era of financial advice is so new that the landscape is still largely uncharted for many firms.

While there are some success stories, there isn't really an authoritative road map on how to best implement a digital advice strategy. Even some of the largest firms, with vast amounts of money to throw at technology, have struggled.

Advisers are told they need a hybrid strategy, one that leverages technology to support human advisers and let them serve a greater number of clients across demographics and asset levels. But what exactly would the ideal platform look like?

My advice as a millennial technology reporter and full-time nerd is to look outside the financial services industry entirely. Not to knock the tech-focused firms doing very cool things with technology, but for my money, no one can yet match the service provided by online retail startups.

One in particular,, has fused the online shopping experience with personalized customer service so successfully, it provides a blueprint for how firms of all sizes can offer hybrid digital advice.

This is what advisers can learn from them.

Take advantage of digital marketing

In 2017, I desperately needed to update my equipment before a snowboard trip to Colorado. I'm talking new snowboard, boots, jacket — the works.

While researching online, I started seeing banner ads and social media posts promoting discounts at Backcountry. I had never heard of them, but the products they advisertised were ones I needed, so I clicked.

The technology exists for today for financial advisers to do the same thing. Instead of cold calling, target prospects doing searches like "should I roll my 401(k) into an IRA?" or "how much should I invest after a raise?" Aside from Betterment's new ad campaign, I rarely see firms promoting digital advice capabilities online (and I'm someone constantly searching relevant keywords).

(More: Advisers can use online info to learn more about prospects — but should they?)

Small firms can't compete with the marketing budgets of a large institution or a VC-backed startup like Betterment, but they can run localized campaigns on social media targeting specific issues. If someone posts on Twitter or Facebook about a major news event, there's a chance for the adviser to engage them.

(More: Automation: An effective way to enhance marketing success)

Let clients onboard themselves with digital tools

Like many online retailers, Backcountry offers consumers a series of filters to narrow its vast warehouse into relevant products. Beginning with hundreds of snowboards, factors like my gender, physical stature, personal preferences and how I planned to use the equipment whittled the selection down to a handful of options.

In other words, the website gave me free, personalized recommendations on which products I should invest in using a completely digital, self-directed process.

This is how firms can employ white-label robo-advice and financial planning technology. Every adviser website should allow prospects to learn about available services and enter their risk profile, investment preferences and financial goals into a digital questionnaire. The tool can use this information to deliver some basic financial advice, such as recommending a type of account and an asset allocation, and offer to digitally open an account.

Yes, opening an investment account is more complicated than buying a snowboard, but the client experience can, and should, be the same. There are plenty of tools on the market that can plug into an adviser's website to offer this functionality.

The human advice component

This is where Backcountry separates itself from other digital retailers.

Before Backcountry processed my transaction, a representative named Mark called me. He noticed I selected some high-performance products and wanted to make sure I knew what I was doing.

I explained my experience and what I needed out of the equipment. He said I made a good selection, but he had some other options for me to consider. He emailed them to me and we took our conversation online until I made my final purchase.

This is how a financial adviser demonstrates value in the era of robo-advice. Let technology automate marketing, client onboarding and small accounts so advisers are free to engage with larger prospects, answer complicated questions and build a personal relationship.

Mark followed up months later via email to ask how my trip went, tell me about a summer sale on snow gear and remind me that I can call anytime.

And I did, nearly a year later, needing some last-minute gear for a spring trip to British Columbia. Between email, phone calls and Backcountry's live chat service, Mark answered all of my questions and made sure I got the right equipment in time for my flight. He even helped when one of my orders hit a snag.

Backcountry even connected with me on social media, and now I recommend it anytime a friend needs some outdoor equipment.

This is the model for firms looking to fully embrace the digital age. Each adviser can serve a greater number of clients more efficiently, create a modern experience that people of all ages now demand, and build deeper relationships with clients than ever before — clients who will evangelize your firm to others.

Let robo-advisers be the Amazon of financial advice. You can be the Backcountry.


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