Technology innovation is happening faster than ever, and the pace is only speeding up.
In order to keep up, advisers need to adopt what futurist Scott Klososky called "high beam thinking."
Instead of thinking about technology disruption as linear change, high beam thinkers are better at taking current events and extrapolating what will come five or even 10 years down the road, said Mr. Klososky, founding partner, TriCorps Technologies, at a recent symposium in New York sponsored by BNY Mellon's Pershing.
There are four things advisers must be adept at to be high beam thinkers, he said. First, they have to ingest a lot of pertinent information and be able to discern which technology developments are good places to invest and which are not. The iPhone may have revolutionized mobile communication, but Google Glass has not.
High beam thinkers not only can decide which technology is important today, but how that technology will impact the future. They also experiment, something financial services professionals need to do more of, Mr. Klososky said.
"You have to be willing to do proof of concepts and test things out," he told registered investment advisers at the event. "Don't spend a ton of money, but at least experiment … love technology just a little bit more than you fear change."
High beam thinking can help firms be more technologically savvy, and can translate into a tangible advantage.
"Firms or organizations that can get an 18-month to two-year lead on competitors, they gain market share," Mr. Klososky said. "You need to know who your competition is, understand what weapons they have, and index so you can be ahead of them."
Advisers must come to terms with the fact that dinners and golfing are no longer enough to win clients, nor is basic trading software or digital platform. Today's best advisers are digitally enhanced, but tomorrow's best will be advisers who can best utilize artificial intelligence, meaning technology data are competitive differentiators, Mr. Klososky said.
"In 10 years, AI is going to have a huge amount to do with winning or losing in the market," he said.
So, what is something advisers can start doing immediately?
Mr. Klososky encouraged advisers to get better about monitoring clients' social feeds. By capturing and recording information clients put out publicly — career changes, leisure activities, a change in family status or a place they visit — they can start collecting the data for forthcoming decision-making AI engines.
He also recommended advisers change staffing practices to hire people with top-notch digital skills and to improve internal digital training. Instead of looking for the best financial professionals, advisers also should look for data analysts, cybersecurity specialists and AI developers.
"We spend way too much time on financial risk, and not nearly enough time on security and innovation risk," Mr. Klososky said.