Fintech to make financial advisers better behavioral coaches

In addition to innovations making planners more productive and freeing up their time, in the future, tools will provide better data-driven intelligence about clients.
SEP 14, 2016
Five years from now financial advisers will be spending more time with clients and they'll be doing a better job of stopping them from making bad investment decisions, according to financial technology leaders. In addition to fintech innovations making advisers more productive and freeing up more of their time, in the future they will provide data-driven intelligence about clients that will allow advisers to be better behavioral coaches, experts said Wednesday at the Financial Planning Association annual meeting in Baltimore. Betterment for Advisors already is designing features to show the theoretical returns for investors if they hadn't made poor trading decisions. They're also trying to identify those clients at risk of making poor moves, said Tom Kimberly, general manager of Betterment for Advisors, which today announced it was changing its name from Betterment Institutional. For instance, if markets fell by a certain percentage, advisers could be notified that particular clients had a 65% chance of panicking and wanting to move some funds out of equities. “The adviser can then call the client and be the behavioral coach,” Mr. Kimberly said. Tech advances also will help advisers with their actual client relationships. (More: Why financial advisers need to worry about technology addiction) Advisers will have the tools to better assess the communication styles and preferences of clients, said Jack Brod, principal of Vanguard, which operates the automated advice platform Personal Advisor Services. “Then advisers can customize their approach to the relationship and make it a more longstanding, loyal relationship,” he said. Finally, the fintech tools that advisers use today to track their client relationships, create financial plans and manage portfolios will be better integrated to improve the experiences of both the adviser and the client, experts said. “We are really at the beginning of the evolution of the adviser- and client-facing wealth management tools,” said John Wotowicz, chief executive of InStream Solutions. As technology eliminates more tasks, advisers will need to make sure they are good at doing those things that computers cannot. That includes hand holding and taking on more of a financial therapist role. “Client psychology will be even more important as we go forward,” said Kevin Keller, chief executive of the Certified Financial Planner Board of Standards Inc. As a result, the CFP Board is beginning to assemble staff teams to think about whether there needs to be more education on such skills as part of the CFP certificate program. “My goal is that financial planners don’t become the travel planners of the 21st Century,” he said.

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