What financial advisers can learn from Amazon

What happens when geography stops being an important buying criteria?
MAY 10, 2017
Recently my phone's storage chip malfunctioned. Unfortunately, I had a full afternoon of meetings and an early morning flight the next day. Thanks to Amazon, I had a new chip in my mailbox by the time I arrived home a couple of hours later that afternoon. How in the world can any electronics store carry enough inventory or be more convenient in giving me exactly what I need so easily? Every retail store is struggling to compete with the geographic omnipotence of Amazon. Our own industry is in the midst of a similar geographic untethering. And it will happen faster than most advisory firms are prepared for. THE RETURN OF HOUSE CALLS The internet, mobile devices and convenience service companies like Amazon, Netflix and Google have made our lives easier, but they are also altering consumers' expectations about service delivery. What happens when your biggest competitive advantage — your proximity to your clients — stops being an advantage? How do you need to evolve when people would rather Skype to meet with their adviser than drive? (More: When machinery makes financial advisers' work obsolete) • Make geography an option. We ask our clients every year how they would like to conduct their review meetings. Across our national firm, with clients of all ages, the fastest-growing segment of requested client meetings are video conferences. Roughly a quarter of all of our meetings today are held by Livestream. We expect that number to increase by double digits every year and surpass 50% in the next couple of years. Ask your clients, and you will probably find many of them would like virtual meetings for at least some of their reviews with you. House calls are coming back, but they shouldn't require you getting in the car. • Redefine your service delivery. There are two major ways to amend your client experience. The first is to hold video meetings, and the second is to provide your clients a mobile way to interact with you. Giving them the ability to use your client portal to change their financial plans, update their balance sheet and send push notifications in both directions keeps you relevant to the client's financial life regardless of whether they are coming to your office. Most wealth managers use their client portal to only provide updates to the client's investments. They can get that from anywhere. You need to make your client portal more expansive, dynamic and interactive. (More: Time for financial advisers to reimagine their offices) • Reimagine the client tools. Here's the rub: Most of our tools are too complicated for our clients to understand and are not integrated into their entire lives. That's not a good thing. Clients' trust in their advisers is what makes them feel good when they leave an in-person meeting, not the rundown of market performance, portfolio growth or the latest low-cost investment covered during their meeting. It's time to use systems that clients can amend and understand without having to be in the office with you. People like to get answers immediately without having to drive. The best way to make that happen is to be present on their phone with systems and reporting your clients can use and have a dynamic way to interact. WHEN GEOGRAPHY DIES Unfortunately, retailers of all stripes are finding that location is not as important to consumers as getting what they need at a price they like. Geography shifting firms are booming, from Netflix to Expedia. Wealth management is not in some protected silo. Just ask Vanguard. Technology and market forces are making it easier every day for people to get their investments and a financial plan in a more convenient and technologically advanced way than their local wealth manager can currently provide. More importantly, they can get help for a fraction of the cost. The personal, local touch still matters, but a lot less than it used to, and far less if we haven't become ingrained into our clients' lives and made it easier to work with us. (More: How technology will alter the role of human advisers in wealth management) The future will require all of us to become less geographically reliant and far more concerned about wrapping ourselves around our clients' entire financial lives, wherever that happens to be. Joe Duran is chief executive of United Capital. Follow him @DuranMoney.

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