From the January 2010 issue of Boomer Market Advisor • Subscribe!

Your clients expect more from your tech

Unfortunately, too many of advisors (and the firms they partner with) are not keeping up with the technology expectations of their clients. According to a recent study from technology consulting provider Capgemini, 66 percent of high net worth individuals stated "online access and capabilities" as an important factor on whether they remained with an advisor - yet only 32 percent of the advisors surveyed estimated their clients would judge it as important. Overall the "online access and capabilities" category had the largest gap of any of the 22 categories in the survey.

One of the primary reasons stems from a historical fear of losing power in the relationship. During the rise of the self-directed, online brokerage firms in the 1990s advisors began to associate online access with losing control. This perception has remained, but I would encourage you to consider the following points.

First, you must use your time as effectively as possible. By enabling your clients to perform tasks on their own time, you are free to focus on building your business and concentrating on more value-added client activities. Some of these self-provisioning capabilities might include retrieving reports online and requesting a change of address.

Demographic changes must also be considered. Generation Y is the most technologically sophisticated generation ever seen. They understand financial markets better than prior generations and many will inherit the wealth your current clients have accumulated. They have different expectations and beliefs regarding relationships with service providers and have higher expectations in the technology they require. While it's no secret that many advisors are challenged by technology, Generation Y has worked with technology all of their lives. The reality is that many of you and the firms you work for are in danger of becoming obsolete if your beliefs around online access and capabilities don't change.

Below are points to think about now to ensure you're positioned to meet the needs of a changing marketplace:

  1. Understand the latest technology - Don't know how to pick up or create a text message? Having trouble with your iPod? Don't know what Facebook is? Your younger years may be past you, but that doesn't mean you can't be up on the latest and greatest technology trends and capabilities.
  2. Ask your service providers for guidance (broker/dealers, custodians, other technology providers) - Most of you are not likely to (nor should you) build your own technology. Get an understanding of where your service providers are heading with their technology and whether they're prepared to meet the challenges that come along with helping you become more efficient and that will enable you to serve the next generation.
  3. Take one step at a time - As evidenced in the Capgemini study, many of you are not meeting your clients' online access expectations. Encourage your clients to get in touch with their money online and work towards realizing operational efficiencies for yourself by providing self-service capabilities.
  4. Your future customers are in the bullpen - They're likely to be the sons and daughters of your current customers. It might not be too long before the kids that are playing video games inherit some or all of their parents' wealth. Are you positioned to retain those assets?

I'm concerned that so many advisors and firms are behind in their thinking regarding online access and capabilities they provide. Your use and delivery of technology capabilities will not only play a pivotal role in determining future success, but could be necessary for your very survival.

Marc Butler is managing director with iNautix (USA) LLC, an affiliate of Pershing LLC in Jersey City, N.J. He can be reached at mbutler@inautix.com.

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