The Best Advisors Understand The Correlation Between Technology & Client Relationships

What keeps you up at night? 

If you’re like some leaders in the financial advisory space, you worry that technology is turning our core service into a commodity.  You toss and turn thinking about how robo-advisors and giant custodians are using new tech to deliver investment management services for miniscule fees. Visions of fee compression and industry obsolescence fill your weary head.

Such fears are understandable. The pace of technological innovation is dizzying and ongoing. And its impact on our business is real. But tech isn’t going to crush our margins or drive us to extinction. Instead, it will help us enhance our most significant competitive advantage: personal connections. If we let it.

As a financial advisor, you understand that most people care more about investment losses than gains. Private investors come to us because they fear making mistakes that will have long-term repercussions for their vision of retirement. Yes, these clients seek sound initial guidance. But they also want someone to provide ongoing unemotional feedback on both their decisions and the state of the market – especially when things are turbulent. In short, our clients want something that no technology can provide – a relationship.

A healthy relationship is mutually beneficial for both clients and advisors. An excellent, well-tended personal connection ensures that the client will judge the firm on more than market returns, which tend to revert to the mean, and allows the firm to deliver added value to the client over time.

Solid client connections develop over time. They are built on frequent interactions – both big and small. And every relationship – no matter how strong – requires constant attention to thrive. In this internet/smartphone age, that attention must also be nearly instantaneous.

Technology and innovation can help us nurture those relationships in three ways. First, and most importantly, carefully chosen tech solutions and process innovations can free our teams from the countless hours they now spend on routine and repetitive tasks. This new-found time can be spent nurturing relationships through more advisor-initiated contacts and faster responses to questions and information requests.

Second, technology can support our relationships by improving the client experience. Client portals, text messaging, and video meetings give clients something they now expect from every business they patronize – ease and convenience.

Finally, digital communications channels such as blogs, Facebook, YouTube and Twitter offer financial advisors the opportunity to boost their brands with both clients and prospects. The most powerful words in the English language are, “Tell me a story.” Firms that invest in building a storytelling capability are better able to differentiate themselves and showcase their expertise.

So, the real threat to our industry isn’t technology itself.  The true danger comes from a failure to accept innovations and use them to support our holistic value proposition based on lasting relationships. Competition is a predator. And like all predators, it first takes down those who lag behind the herd. Where is your firm?  Thundering ahead into the future, or looking over its shoulder?